CA Arvind C Thomas’ Post

RITESH JEWELS PRIVATE LIMITED, a company registered under the Companies Act, 1956/2013 in Gujarat, was penalised by the Ministry of Corporate Affairs (MCA) for failing to include Corporate Identification Number (CIN) and the registered office address on its letterhead, as required by Section 12(3)(c) of the Companies Act, 2013. LETTERHEAD ADDRESS DID NOT MATCH WITH MCA’S RECORD The MCA's observation arose from an ordinary resolution passed during an Annual Compliance Meeting on September 22, 2021, which indicated the absence of the Corporate Identification Number (CIN) on the letterhead, leading to a violation of the Act's provisions. Upon investigation, it was discovered that the company's letterhead address did not match the one on record with the MCA. The discrepancy prompted further examination by the Registrar of Companies (ROC) Ahmedabad, which confirmed the company's non-compliance with the statutory requirements. PENALTY IMPOSED ON COMPANY & THE DIRECTORS SEPARATELY Consequently, penalties were imposed under Section 12(8) of the Companies Act, 2013, amounting to Rs. 1,00,000 on the company and Rs. 1,00,000 each on two directors/key managerial persons. In determining the penalty, factors such as disproportionate gain, loss to investors, and the repetitive nature of the default were considered. However, it was noted that quantifying these factors proved challenging due to insufficient data. Nevertheless, the penalties were deemed appropriate given the severity of the default and its duration from September 22, 2021, to July 20, 2023, totalling 667 days. PENALTIES TO BE PAID FROM PERSONAL INCOME, ON MCA’S WEBSITE The adjudicating officer emphasized that the penalty should be paid from personal sources/income of the officers in default. The notices were instructed to make the payment within 90 days through e-payment on the MCA website. Additionally, they were informed of their right to appeal the decision within sixty days, following the procedures outlined in the Companies Act, 2013. Non-payment of the penalty could result in further consequences, including fines and imprisonment for the company and its officers in default, as stipulated by Section 454 of the Companies Act, 2013. #mca #ministryofcorporateaffairs #penalties #epayment #regulatorycompliance #companiesact #india #business #trade #commerce #law #legal #lawyer #compliance

📢 Important Update for Corporate Compliance📢 MCA Imposes ₹17 Lakh Penalty on Paris Elysees India Private Limited for Non-Compliance The Ministry of Corporate Affairs (MCA), through its Jaipur office, has imposed substantial penalties on Paris Elysees India Private Limited and its directors for failing to adhere to the Companies Act, 2013, and the Companies (Significant Beneficial Owners) Rules, 2018. The violations involved the company's failure to submit declarations in Form BEN-1 and to issue notices in Form BEN-4. This case serves as a crucial reminder for companies to ensure compliance with all statutory requirements, particularly those related to significant beneficial ownership. #MCA #Corporatecompliances #Compliances #Companiesact #CS #Director #Compliances #Corporate #Governance #Rules

Delay in SH-7 Filing for Redemption of Redeemable Preference Shares (RPS) In a recent adjudication by the Registrar of Companies (ROC), Gujarat, M/s. Steelsmith Continental Manufacturing Pvt Ltd was penalized under Section 454 of the Companies Act, 2013, for the delay in filing Form SH-7. The delay pertained to the redemption of 1,70,000 Redeemable Preference Shares (RPS) worth Rs. 10 each, which was approved by the Board on June 2, 2022. As per the law, the company was required to file SH-7 within 30 days, but the form was submitted only on April 15, 2023, and rejected. A fresh filing was made on January 17, 2024, and approved on April 30, 2024, resulting in a delay of 669 days. Upon submission of the form, the Hon'ble Office of the Registrar of Companies (ROC) directed the company to re-submit the form, stating: "FORM IS FILED WITH A DELAY. NECESSARY CONDONATION OF DELAY APPLICATION REQUIRED TO BE FILED AND THE SRN TO BE INITIATED." Despite the company citing technical reasons for the delay, the ROC imposed a penalty of Rs. 3,34,500/- on the company and Rs. 1,00,000/- on its Managing Director, under Section 64 of the Companies Act, 2013. To avoid such penalties and compliance issues, it is essential for companies and professionals to adopt the following best practices: Proactive Monitoring: Implement a robust compliance tracking system that monitors key statutory deadlines. Filing forms like SH-7 within the prescribed time frame is critical, as delays not only incur penalties but may also impact the company’s credibility with regulators. Technical Preparedness: Always have a backup plan for technical issues that might arise while filing forms online. Technical glitches or system outages can happen, and being prepared to troubleshoot or escalate issues with the concerned authorities promptly can prevent costly delays. Internal Audits: Regular internal audits of secretarial records can help companies identify lapses before they escalate. In this case, the default was discovered during an internal review, which shows the effectiveness of such audits. However, early identification and immediate rectification are crucial. #CorporateGovernance #CompaniesAct2013 #Compliance #RPS #SH7Filing #Penalty #BusinessCompliance #CorporateLaw #CompanySecretary #TimelyFiling #CondonationOfDelay

The Valid Points Law Offices, India (TVPLO)| #ComplianceCheckpost #Indiaseries | September 13, 2024 #update September 021/2024/India Topic - "NON-COMPLIANCE WITH AUDIT COMMITTEE REQUIREMENTS". India Neeraj Dubey #India #indianlaw #corporatelaw #corporatelawyer #compliance #corporate #business

The case of RITESH JEWELS PRIVATE LIMITED, as adjudicated by the Registrar of Companies (ROC) in Gujarat, serves as a notable example of the consequences of non-compliance. The company, in violation of Section 12(3)(c) of the Companies Act, failed to mention its CIN on the letterhead, a mandatory stipulation. Despite receiving adjudication notices and opportunities for hearings, the company persisted in its non-compliance stance. The adjudicating authority, recognizing the severity of the violation, imposed penalties on the company and its officers under Section 454 of the Companies Act. This enforcement action reflects the gravity of the offense and the imperative of adhering to statutory obligations. The penalties, amounting to Rs. 1,00,000/- on the company and Rs. 1,00,000/- each on two directors, underscore the importance of compliance with regulatory mandates. The enforcement process highlighted the responsibility of directors and key managerial personnel to ensure compliance, with ignorance of the law deemed unacceptable. The penalties imposed serve as a deterrent against future non-compliance instances, emphasizing the need for companies to meticulously adhere to statutory requirements, including the mention of CIN on official documents. Furthermore, the appointment of an Adjudication Authority, as empowered by the Companies Act, underscores the government's commitment to enforcing accountability and maintaining transparency in #corporategovernance. The authority's role in adjudicating penalties underscores the seriousness with which regulatory compliance is viewed. This enforcement action by the MCA reinforces the significance of regulatory compliance in corporate governance. Companies are reminded of their obligation to diligently adhere to statutory requirements to avoid legal repercussions. The adjudication process serves as a mechanism to ensure accountability and uphold the integrity of corporate operations. #mca #cin #startup #incubator #corporateidentificationnumber #enterpreneur #compliance #cs #companysecretary #paralegalconsultant #noncompliance #startupbusiness #businessconsultant #companyincorporation #drafting #companylaw #regultoryaffairs

🚨 ADJUDICATION ORDER ISSUED FOR NON-COMPLIANCE WITH SBO REGULATIONS: COMPANY SECRETARY ALSO PENALIZED ALONG WITH DIRECTORS & COMPANY. 🚨 The ROC, NCT of Delhi & Haryana, has imposed penalties of ₹49,200 on the Company Secretary, ₹98,400 on the Directors, ₹1.60 lakh on the Company, and ₹2 lakh on the Significant Beneficial Owner for non-compliance with Section 90 of the Companies Act, 2013, related to the maintenance and filing of Significant Beneficial Ownership (SBO) records. 👉In the Matter of M/s. ATOMY ENTERPRISE INDIA PRIVATE LIMITED. 📌 Key Highlights: 1.      Violation of Section 90(4): Failure to file e-Form BEN-2 for significant beneficial owners. 2.      Violation of Section 90(1): Significant Beneficial Owners did not submit the required declaration in BEN-1. 💡 Compliance Alert: Non-compliance with SBO filings invite strict penalties, including for the Company Secretary. The Order Copy is attached herewith for reference.

With reference to my session at Navi Mumbai Chapter of ICSI on recent important judgments in Corporate Laws ( i.e. Company Law + SEBI Laws ), sharing the details of judgments that were covered in the session. Please note that this is not the detailed PPT. In the session, I covered the facts of the case, corresponding relevant cases and recent adjudication orders by Registrar of Cos. Selection of these judgments took a lot time, because the purpose of my presentation was to improve the compliance mechanism in corporates and remove the ambiguities that were created... Feedback appreciated.

Over the years, the process of incorporating a company has been made simpler, which encourages full compliance by the companies. The management should be fully aware of the post-incorporation compliance to avoid any penalties or punishments. The Companies Act 2013 is a stringent act and leaves no room for any mistakes. “Ignorantia juris non excusat” means “ignorance of law is not an excuse”. This is a legal maxim which goes on to say that one cannot escape liability on the pretext of unawareness of the law. Thus the directors and shareholders will have to be aware of the legal compliance involved post-incorporation of the company. . #compliance #compliancetrabalhista #complianceofficer #compliancedigital #incorporation #incorporations #companyincorporation #incorporations #privatelimited #privatecompany #privatelimitedcompany #pvtltd #company #boardmeeting #companymeeting #companylaw #companysecretaries #companysecretarystudents #companysecretary #icsi #icsijourney #icsistudent #icsistudents #educational #government #india #commerce

The Ministry of Corporate Affairs has amended the Nidhi Rules, 2014, effective July 16, 2024. Previously, companies could use "Nidhi Limited" in their names without being declared as such by the Central Government. Now, only recognized #Nidhi #Companies can use this term, ensuring transparency and protecting depositors from potential confusion. #CorporateLaw #NidhiCompany #MCA #RegulatoryUpdates #Compliance #InvestorProtection #LegalUpdates #Director #ManagingDirector

**Compliance Update** Supreme Court Agrees with Allahabad High Court: No Retrospective Disqualification of Directors Under Section 164(2) of the Companies Act, 2013 Before FY 2014-15. The Supreme Court has expressed its prima facie agreement with the Allahabad High Court's interpretation of Section 164(2) of the Companies Act, 2013 which disqualifies directors for not filing financial statements or annual returns for three consecutive years, does not apply to periods before FY 2014-15. The High Court concluded that provisions with punitive effects, such as Section 164(2), should not be applied retrospectively to financial years where the disqualification criteria were not in force. This may indicate that directors are safe from disqualification based on non-compliance before this time. Moving forward, it becomes crucial for companies to ensure strict and consistent adherence to the Companies Act and Secretarial Standards compliance requirements, particularly the timely filing of financial statements from the fiscal year 2014-15 onwards. Failure to undermine the compliances could result in significant legal and regulatory consequences. Case Details: Union Of India Vs. Jai Shankar Agrahari, SLP(C) Nos. 16213-16373/2021 #CorporateLaw #SupremeCourt #CompaniesAct #Directors #Compliance #LegalUpdate