Hefty penalty for non-maintenance of registered office as per section 12?

Hefty penalty for non-maintenance of registered office as per section 12?. In this MCA adjudication order, it has been observed that the company has shifted its registered office from the address recorded with the registrar to different location and same has not been reported to the registrar within the stipulated time. Accordingly, ROC called upon the company to submit certain documents. However, the said letter was returned undelivered from the company with the postal authority remark as “LEFT”.
The Companies Act, 2013 mandates that every company must have a registered office within thirty days of incorporation and ensure its continuous existence for receiving communications and notices. Companies must verify their registered office with the Registrar within the prescribed period and display essential details such as the name, address, and Corporate Identity Number on official documents. Any change in the registered office requires compliance with specific procedures, including filing notices with the Registrar and obtaining approvals in certain cases. Additionally, if a company is suspected of being inactive, the Registrar has the authority to conduct a physical verification and take action for its removal.
Applicable Provisions
This MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Mumbai, for consideration.
Facts of the Case with ROC and RD
In George Rao and Company Engg Private Limited, concerned ROC had passed adjudication order dated 22/12/2023 held the company and its director, who have defaulted liable for penalty under section 12(8) of the Act from 12/12/2021 to 21/12/2023 (739 days) for not maintaining the registered office at the then given address of registered office to the MCA.
The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 26/06/2024.The authorised representative on the behalf of the company stated that the:-

Registered office address has not change and continues at the same address given in the MCA database. She further added that the said registered office is under the control of two complainant directors namely Shri Kailash Purushottam Khairnar & Smt. Kirti Kailash Khairnar.

Therefore, the appellants are not able to furnish any proof of maintaining registered office along with the utility bills and copy of other government daks received at registered office during the default period.

Imposed Penalty
Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers for violation of section 12 of the Act.

To whom penalty imposed

No. of days

Per day penalty

Actual Penalty

Maximum Penalty

Reduced penalty as per section 446B

On Company

12/12/2021 to 21/12/2023

1,000

7,39,000

1,00,000

50,000

On director

1,000

7,39,000

1,00,000

50,000

Reduction in Penalty
Based on the all the facts, circumstances and submissions made by the appellant company, concerned RD is of view that adjudication order of ROC dated 2/12/2023 is in accordance with the provisions of the Act.
Any Benefit of Section 446B of Companies Act
Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In this adjudication matter of George Rao and Company Engg Private Limited the fulfil the criteria of section 446B of the companies Act. Thus, the penalty imposed on the company and officers in default is as per section 446B of the Act.
CCL Observation: -
In conclusion, the appeal under Section 454(5) of the Companies Act, 2013, was carefully examined by the Regional Director and considering all the fact and circumstances RD is confirm the order ROC. This case law highlights the importance of intimating each and every change related to the registered office of the company.
Download MCA Adjucation Order

In this MCA adjudication order, it has been observed that the company has shifted its registered office from the address recorded with the registrar to different location and same has not been reported to the registrar within the stipulated time. Accordingly, ROC called upon the company to submit certain documents. However, the said letter was returned undelivered from the company with the postal authority remark as “LEFT”.

The Companies Act, 2013 mandates that every company must have a registered office within thirty days of incorporation and ensure its continuous existence for receiving communications and notices. Companies must verify their registered office with the Registrar within the prescribed period and display essential details such as the name, address, and Corporate Identity Number on official documents. Any change in the registered office requires compliance with specific procedures, including filing notices with the Registrar and obtaining approvals in certain cases. Additionally, if a company is suspected of being inactive, the Registrar has the authority to conduct a physical verification and take action for its removal.

Applicable Provisions

This MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (WR), Mumbai, for consideration.

Facts of the Case with ROC and RD

In George Rao and Company Engg Private Limited, concerned ROC had passed adjudication order dated 22/12/2023 held the company and its director, who have defaulted liable for penalty under section 12(8) of the Act from 12/12/2021 to 21/12/2023 (739 days) for not maintaining the registered office at the then given address of registered office to the MCA.

The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 26/06/2024.The authorised representative on the behalf of the company stated that the:-

Registered office address has not change and continues at the same address given in the MCA database. She further added that the said registered office is under the control of two complainant directors namely Shri Kailash Purushottam Khairnar & Smt. Kirti Kailash Khairnar.
Therefore, the appellants are not able to furnish any proof of maintaining registered office along with the utility bills and copy of other government daks received at registered office during the default period.

Imposed Penalty

Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers for violation of section 12 of the Act.

To whom penalty imposed	No. of days	Per day penalty	Actual Penalty	Maximum Penalty	Reduced penalty as per section 446B
On Company	12/12/2021 to 21/12/2023	1,000	7,39,000	1,00,000	50,000
On director	12/12/2021 to 21/12/2023	1,000	7,39,000	1,00,000	50,000

Reduction in Penalty

Based on the all the facts, circumstances and submissions made by the appellant company, concerned RD is of view that adjudication order of ROC dated 2/12/2023 is in accordance with the provisions of the Act.

Any Benefit of Section 446B of Companies Act

Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In this adjudication matter of George Rao and Company Engg Private Limited the fulfil the criteria of section 446B of the companies Act. Thus, the penalty imposed on the company and officers in default is as per section 446B of the Act.

CCL Observation: -

In conclusion, the appeal under Section 454(5) of the Companies Act, 2013, was carefully examined by the Regional Director and considering all the fact and circumstances RD is confirm the order ROC. This case law highlights the importance of intimating each and every change related to the registered office of the company.