MCA Impose Penalty for Failure to Affix Nameplate at The Registered Office

MCA Impose Penalty for Failure to Affix Nameplate at The Registered Office. Applicable Provision
The matter at hand involves the violation of Section 12(3) of the Companies Act, 2013, which mandates that every company shall have a registered office and that the company must provide its updated registered office address to the Registrar of Companies (ROC).
Section 12(3) specifies the company's responsibility to ensure that its registered office is functional and that all communication from the ROC is duly received at the given address. Any failure to comply with these requirements may lead to penalties and consequences as per the law.
Facts of the Case
Nirmaan Creatives Private Limited faced scrutiny for non-compliance with Section 12(3) of the Companies Act, 2013. The company's registered office, which was earlier provided to the ROC, was found to be non-functional or inaccessible as SCN issued for seeking information, returned undelivered by the postal authorities. Hence ROC ordered spot inspection report as on 24.11.2020, it is found that company is not maintaining its registered office at the premises mentioned in the MCA portal. There is no name plate of the company affixed at the premises/location of the registered office of the company and accordingly ROC imposed penalty.
The company's failure to update or verify its registered office with the ROC resulted in a violation of the statutory provision under Section 12(3).
The company filed an appeal and stated that co. received all earlier notices issued by the ROC, Mumba at the registered office of the company before 19.03.2020. Due to COVID-19 outbreak all posts and couriers were either running delay or stopped completely.
The appellants further stated that they have replied to the SCN dated 19.03.2020 by mail dated 31.08.2020 and mentioned that name plate was not available at the same premises entrance as the same was being removed due to major work maintenance works being carried out by the society and further repairs were yet to be done in the registered office premises.
Imposed Penalty
After considering the fact and circumstances, the Registrar of Companies imposed a penalty on Nirmaan Creatives Private Limited as under:

On Company: Rs. 1,00,000

On 2 Directors: Rs. 1,00,000 each

Reduction in Penalty by RD
Upon hearing the appeal made by Nirmaan Creatives Private Limited before the Regional Director (RD), the company presented several mitigating factors for the violation, including the company's intent to rectify the issue and the difficulties faced in ensuring the accessibility of the registered office. The company also assured that it had taken corrective measures, including relocating to a new office address and ensuring proper communication channels with the ROC moving forward. Taking these factors into consideration, the Regional Director granted a reduction in the imposed penalty.
On Company: Rs, 7,500

Indira S. Agarwal: Rs. 5,000

Suresh G. Agarwal: Rs. 5,000

Conclusion
The case of Nirmaan Creatives Private Limited serves as a reminder to all companies of the importance of complying with the statutory requirements of Section 12(3) of the Companies Act, 2013. Maintaining a functional registered office and ensuring that the address provided to the ROC is accurate and accessible is a fundamental obligation for every company. Non-compliance can lead to significant penalties, as demonstrated in this case. However, companies that take corrective action and demonstrate their intent to comply may find some relief in the form of reduced penalties, as seen in the intervention of the Regional Director. Companies are urged to regularly update their registered office details and ensure the accessibility of the address to avoid penalties and other legal complications.
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Applicable Provision

The matter at hand involves the violation of Section 12(3) of the Companies Act, 2013, which mandates that every company shall have a registered office and that the company must provide its updated registered office address to the Registrar of Companies (ROC).

Section 12(3) specifies the company's responsibility to ensure that its registered office is functional and that all communication from the ROC is duly received at the given address. Any failure to comply with these requirements may lead to penalties and consequences as per the law.

Facts of the Case

Nirmaan Creatives Private Limited faced scrutiny for non-compliance with Section 12(3) of the Companies Act, 2013. The company's registered office, which was earlier provided to the ROC, was found to be non-functional or inaccessible as SCN issued for seeking information, returned undelivered by the postal authorities. Hence ROC ordered spot inspection report as on 24.11.2020, it is found that company is not maintaining its registered office at the premises mentioned in the MCA portal. There is no name plate of the company affixed at the premises/location of the registered office of the company and accordingly ROC imposed penalty.

The company's failure to update or verify its registered office with the ROC resulted in a violation of the statutory provision under Section 12(3).

The company filed an appeal and stated that co. received all earlier notices issued by the ROC, Mumba at the registered office of the company before 19.03.2020. Due to COVID-19 outbreak all posts and couriers were either running delay or stopped completely.

The appellants further stated that they have replied to the SCN dated 19.03.2020 by mail dated 31.08.2020 and mentioned that name plate was not available at the same premises entrance as the same was being removed due to major work maintenance works being carried out by the society and further repairs were yet to be done in the registered office premises.

Imposed Penalty

After considering the fact and circumstances, the Registrar of Companies imposed a penalty on Nirmaan Creatives Private Limited as under:

On Company: Rs. 1,00,000
On 2 Directors: Rs. 1,00,000 each

Reduction in Penalty by RD

Upon hearing the appeal made by Nirmaan Creatives Private Limited before the Regional Director (RD), the company presented several mitigating factors for the violation, including the company's intent to rectify the issue and the difficulties faced in ensuring the accessibility of the registered office. The company also assured that it had taken corrective measures, including relocating to a new office address and ensuring proper communication channels with the ROC moving forward. Taking these factors into consideration, the Regional Director granted a reduction in the imposed penalty.

On Company: Rs, 7,500

Indira S. Agarwal: Rs. 5,000
Suresh G. Agarwal: Rs. 5,000

Conclusion

The case of Nirmaan Creatives Private Limited serves as a reminder to all companies of the importance of complying with the statutory requirements of Section 12(3) of the Companies Act, 2013. Maintaining a functional registered office and ensuring that the address provided to the ROC is accurate and accessible is a fundamental obligation for every company. Non-compliance can lead to significant penalties, as demonstrated in this case. However, companies that take corrective action and demonstrate their intent to comply may find some relief in the form of reduced penalties, as seen in the intervention of the Regional Director. Companies are urged to regularly update their registered office details and ensure the accessibility of the address to avoid penalties and other legal complications.