Company Penalized for Delayed Company Secretary Appointment under Companies Act, 2013 The Adjudicating Officer, appointed by the Ministry of Corporate Affairs under the Companies Act, 2013, found a company in violation of Section 203 for ...
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Company Penalized for Delayed Company Secretary Appointment under Companies Act, 2013
The Adjudicating Officer, appointed by the Ministry of Corporate Affairs under the Companies Act, 2013, found a company in violation of Section 203 for delayed appointment of a Company Secretary. Penalties were imposed on the company and its officers for the non-compliance, with amounts calculated based on the duration of default. The Officer deemed the penalties appropriate considering the offense. The company and officers were instructed to pay the penalties through the Ministry's portal, with an option to appeal within sixty days. Failure to pay within the specified timeframe would result in consequences outlined in the order.
Issues: 1. Appointment of Adjudicating Officer 2. Company's Non-Compliance with Section 203 of the Companies Act, 2013
Appointment of Adjudicating Officer: The Ministry of Corporate Affairs appointed the Adjudicating Officer under section 454(1) of the Companies Act, 2013, to adjudicate penalties. The Officer was entrusted to adjudicate penalties under section 203 of the Act from 02.11.2018. The appointment was made in accordance with the Companies (Adjudication of Penalties) Rules, 2014.
Company's Non-Compliance with Section 203 of the Companies Act, 2013: The company failed to comply with the provisions of section 203(1) of the Act, which mandates the appointment of whole-time key managerial personnel, including a company secretary. The company appointed a new Company Secretary with a delay of 91 days after the previous Secretary resigned, violating section 203(4) of the Act. The company and its officers were found liable for penalties under section 203(5) of the Act for the period of non-compliance.
The Adjudicating Officer imposed penalties on the company and its officers for the violation. The penalty amounts were calculated based on the number of days of default and the provisions of the Act. The Officer concluded that the penalties imposed were commensurate with the failure committed by the company and its officers.
The company and its officers were directed to pay the imposed penalties through the Ministry of Corporate Affairs portal. An appeal against the order could be filed with the Regional Director within sixty days from the date of receipt of the order. The order highlighted the consequences of non-payment of the penalty within the prescribed time limit.
A copy of the order was sent to the company, all directors/officers in default, and the Office of the Regional Director (Northern Region), Ministry of Corporate Affairs at New Delhi, in accordance with the Companies (Adjudication of Penalties) Rules, 2014.
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