• Notification Date: 11-12-2023
• Notification No: N/A

MCA imposes Rs. 5 Lakh Penalty on Company and Directors for Non-Maintenance of Registered Office

The Ministry of Corporate Affairs has issued a penalty of Rs. 5 Lakhs on a company and its directors for non-maintenance of registered office. On the basis of a Complaint received, a Show Cause Notice under Section 206(1) of the Companies Act, 2013 was issued to the company, DP Investment Services Private Limited and its Directors. 

But the Show Cause Notice addressed to the company returned undelivered with Postal Remark “No such persons, RTS”. Further letter issued to the company and 4 directors under Section 206(1) of the companies Act, 2023, another letter issued under Section 206(3) of the Companies Act, 2013 no reply has been received. Further, upon visiting the registered office address of the company, it was noticed that the office was locked and there was no sign board mentioning the details of the company. 

As the aforesaid notice/letter addressed to the company was returned undelivered, it is presumed that the company has not maintained its registered office at the recorded address furnished by it and available in MCA21 records. Section 12 of the Companies Act, 2013 outlines the obligations related to the registered office of a company as follows – 

1. Registered Office Requirement:   

a) A company must have a registered office from the fifteenth day of its incorporation and continuously thereafter. 

b) The office should be capable of receiving and acknowledging communications and notices.  

2. Verification to Registrar:    

a) Within thirty days of incorporation, the company must provide the Registrar with verification of its registered office details.  

3. Display of Information:  

a) The company needs to display its name and registered office address visibly outside its business locations.  

b) Engrave its name on its seal.   

c) Include its name, registered office address, Corporate Identity Number, and contact details in business letters, billheads, and other official communications.     

d) Print its name on financial documents like hundies, promissory notes, and bills of exchange.  

4. Name Change:     

a) If the company changed its name in the last two years, it should also display the former name(s) along with the current one.  

5. Specific Mention for “One Person Company”:    

a) For “One Person Companies,” the term should be mentioned in brackets below the company’s name in all printed, affixed, or engraved materials.  

6. Notice of Change:    

a) Any change in the registered office location must be reported to the Registrar within fifteen days, along with the necessary verification.  

7. Restrictions on Changing Registered Office:  

a) The registered office can only be changed through a special resolution.  

b) For existing companies, the change must be within the local limits of the current office or as per a special resolution.  

c) For other companies, the change must be within the local limits of the first office or as per a special resolution.  

8. Penalties for Non-Compliance:     

a) Failure to comply with these requirements can lead to penalties. 

b) The company and responsible officers may be liable for a daily penalty (not exceeding one lakh rupees) for each day of non-compliance, up to a maximum of one thousand rupees per day.  

Hence, the Adjudicating Officer issued a Show Cause Notice under Sub-Rule (2) of Rule 3 of the Companies (Adjudication of Penalties) Rules, 2014 for contravention of Section 12(1) of the Companies Act, 2013 to the Company and its directors/officer-in-default viz.  

(i) Shri Debasis Panda (DIN 022820448),  

(ii) Shri Arabinda Nayak (DIN 03092525), Shri Maheswar Tripathy (DIN 05357336) and Shri Pravat Kulnar Sahoo (DIN 0537345).  

In response to this Show Cause Notice, response has not been received till date either from the abovementioned company or its directors. In response to this, no communication was received either from the company or any of the Directors and the Show Cause Notice addressed to the company returned undelivered with Postal Remark “No such Addressee to 1 and 3 and 2nd one left”.  

On the fixed date no one appeared before the Adjudicating Officer and the matter was heard. Having considered the facts, circumstances, and documentary evidence of the case, and after considering the factors above, the A.O. is of the considered view that the company has not maintained its registered office from. 16.05.2023 (date of issuance of the notice) to 30.11.2023 (date of hearing). The company and directors were thus directed to pay a penalty to the tune of Rs. 5 Lakhs. The company and its directors were directed to rectify the default immediately from the date of receipt of the copy of this order. The Penalty imposed shall be paid through the Ministry of Corporate Affairs portal only, the MCA order added.