MCA imposes penalty for failure to update registered office details

MCA imposes penalty for failure to update registered office details. Section 12 of the Companies Act, 2013 mandates that every company registered under the Act must have a registered office within India, and it must be reported to the Registrar of Companies (RoC) within 30 days of incorporation. This section is critical as it ensures that the company maintains a legitimate, identifiable address where legal documents and official correspondence can be sent. Non-compliance with Section 12 can result in penalties, including fines and potential disqualification of directors, along with other legal repercussions.
In the case of Kovai Medical Center and Hospital Limited, timely compliance with Section 12, along, was scrutinized during the proceedings, further emphasizing the importance of maintaining up-to-date records, including the registered office details
Applicable Provision
Section 12 of the companies Act requires that the company notify the Registrar of Companies (RoC) of the address of its registered office, along with any subsequent changes to the office address.
The registered office must be the place where legal documents and notices related to the company can be served, and the company is obligated to display the address on all business correspondence and documents.
Facts of the Case
ROC has observed from Form INC-22 that the Company by a Board Resolution passed at the Board Meeting held on 08.02.2018, shifted its Registered Office from Post Box No. 3209, Avanashi Road, Coimbatore- 641014 to Door No. 99, Avanashi Road, Coimbatore- 641014. The company has failed to comply with the provisions of Sec. 12(3) of the Companies Act, 2013 as the company had been maintaining its Registered Office in Post Box No. 3209 during the period from 01.04.2014 (date from which Sec. 12 came into effect) to 08.02.2018 (date from which registered office shifted to Door No. 99, Avanashi Road, Coimbatore - 641 014)
Company has made the appeal with the concerned RD and contended that company has not shifted its registered office as claimed in the order and the company has not violated Sec. 12(3) of the Companies Act, 2013. The company has changed its registered office to Avanashi Road, Civil Aerodrome Post, Coimbatore - 641 014 since 30.12.1988. At that time, the local approving authority was Kalapatti Panchayat and there were no door number given for the address in which both the Hospital and the Registered Office of the company was situated, due to which P.O. Box address was obtained from the postal authorities by the Company to enable effective service of documents in terms of Sec. 55 of the erstwhile Companies Act, 1956.
The company vide resolution dated 08.02.2018 inserted the Door No. 99 (which was allotted later) in its registered office address and the company has filed Form INC-22 to record the same with MCA. Hence, he submitted that the company has not shifted its registered office as claimed in the order and the company has not violated Sec. 12(3) of the Companies Act, 2013 and hence prayed for lenient view.
Penalty Imposed
Upon examination, the Adjudicating Officer of the Registrar of Companies (ROC) Chennai, levied a penalty on the company and its officers in default.

Violation of Section

Penalty Imposed on:

Penalty imposed by ROC

Penalty imposed by RD

Section 12 of the companies Act 2013

Company

1 Lakh

20,000

Director

1,00,000 each on all directors

10,000 each on all directors

Reduction in Penalty
Upon representation and considering the submissions made by the appellant, the Regional Director (Southern Region), Chennai, took a lenient view and the penalty was reduced proportionally. The final penalty amount was adjusted to a lower sum as mentioned above in the table to ensure compliance while balancing fairness in enforcement.
Conclusion
This case serves as a reminder to companies regarding the importance of adhering to filing requirements and the consequences of non-compliance under the Companies Act, 2013. It also highlights the possibility of leniency in penalty imposition when a company demonstrates a genuine intent to comply and takes corrective measures promptly.
For Kovai Medical Center and Hospital Limited, the reduction in penalty underscores the regulatory authorities' understanding and their willingness to accommodate companies that show proactive steps toward rectifying their mistakes. However, the case emphasizes the necessity for all companies to remain diligent and timely in their compliance to avoid penalties and ensure smooth operations within the legal framework.
Download MCA Adjudcation Order

Section 12 of the Companies Act, 2013 mandates that every company registered under the Act must have a registered office within India, and it must be reported to the Registrar of Companies (RoC) within 30 days of incorporation. This section is critical as it ensures that the company maintains a legitimate, identifiable address where legal documents and official correspondence can be sent. Non-compliance with Section 12 can result in penalties, including fines and potential disqualification of directors, along with other legal repercussions.

In the case of Kovai Medical Center and Hospital Limited, timely compliance with Section 12, along, was scrutinized during the proceedings, further emphasizing the importance of maintaining up-to-date records, including the registered office details

Applicable Provision

Section 12 of the companies Act requires that the company notify the Registrar of Companies (RoC) of the address of its registered office, along with any subsequent changes to the office address.

The registered office must be the place where legal documents and notices related to the company can be served, and the company is obligated to display the address on all business correspondence and documents.

Facts of the Case

ROC has observed from Form INC-22 that the Company by a Board Resolution passed at the Board Meeting held on 08.02.2018, shifted its Registered Office from Post Box No. 3209, Avanashi Road, Coimbatore- 641014 to Door No. 99, Avanashi Road, Coimbatore- 641014. The company has failed to comply with the provisions of Sec. 12(3) of the Companies Act, 2013 as the company had been maintaining its Registered Office in Post Box No. 3209 during the period from 01.04.2014 (date from which Sec. 12 came into effect) to 08.02.2018 (date from which registered office shifted to Door No. 99, Avanashi Road, Coimbatore - 641 014)

Company has made the appeal with the concerned RD and contended that company has not shifted its registered office as claimed in the order and the company has not violated Sec. 12(3) of the Companies Act, 2013. The company has changed its registered office to Avanashi Road, Civil Aerodrome Post, Coimbatore - 641 014 since 30.12.1988. At that time, the local approving authority was Kalapatti Panchayat and there were no door number given for the address in which both the Hospital and the Registered Office of the company was situated, due to which P.O. Box address was obtained from the postal authorities by the Company to enable effective service of documents in terms of Sec. 55 of the erstwhile Companies Act, 1956.

The company vide resolution dated 08.02.2018 inserted the Door No. 99 (which was allotted later) in its registered office address and the company has filed Form INC-22 to record the same with MCA. Hence, he submitted that the company has not shifted its registered office as claimed in the order and the company has not violated Sec. 12(3) of the Companies Act, 2013 and hence prayed for lenient view.

Penalty Imposed

Upon examination, the Adjudicating Officer of the Registrar of Companies (ROC) Chennai, levied a penalty on the company and its officers in default.

Violation of Section	Penalty Imposed on:	Penalty imposed by ROC	Penalty imposed by RD
Section 12 of the companies Act 2013	Company	1 Lakh	20,000
Section 12 of the companies Act 2013	Director	1,00,000 each on all directors	10,000 each on all directors

Reduction in Penalty

Upon representation and considering the submissions made by the appellant, the Regional Director (Southern Region), Chennai, took a lenient view and the penalty was reduced proportionally. The final penalty amount was adjusted to a lower sum as mentioned above in the table to ensure compliance while balancing fairness in enforcement.

Conclusion

This case serves as a reminder to companies regarding the importance of adhering to filing requirements and the consequences of non-compliance under the Companies Act, 2013. It also highlights the possibility of leniency in penalty imposition when a company demonstrates a genuine intent to comply and takes corrective measures promptly.

For Kovai Medical Center and Hospital Limited, the reduction in penalty underscores the regulatory authorities' understanding and their willingness to accommodate companies that show proactive steps toward rectifying their mistakes. However, the case emphasizes the necessity for all companies to remain diligent and timely in their compliance to avoid penalties and ensure smooth operations within the legal framework.