MCA Imposes Penalty for Omission of 'Limited’ word on Company Letterhead

MCA Imposes Penalty for Omission of 'Limited’ word on Company Letterhead. Applicable Provision
Section 12(3)(c) of the Companies Act, 2013 mandates that every company must have its name, address of its registered office, Corporate Identity Number (CIN), along with telephone number, fax number (if any), email, and website addresses (if any) printed on all business letters, billheads, letter papers, notices, and other official publications. This ensures transparency and proper identification of the company in all official communications.
Facts of the Case <> ROC and RD
Introduction: This order is issued in response to the appeal filed by the company, Utkal Chamber of Commerce and Industry Limited (UCCIL), and its directors against the penalty imposed by this office for violation of Section 12(3)(c) of the Companies Act, 2013, as detailed in the Show Cause Notice (SCN) issued on 12.10.2021, and the subsequent order dated 14.01.2022. The issue pertains to the advertisement published in the Times of India on 06.09.2021, wherein the company’s name was printed without the word “Limited,” in contravention of the Companies Act.
Allegation and Initial Findings: The allegation raised by Shri Ashok Agrawal, Member of UCCIL, was regarding the joint advertisement published by UCCIL and another organization on 06.09.2021. The advertisement featured the company’s name as “Utkal Chamber of Commerce and Industry,” without the word “Limited.” This omission was deemed a violation of Section 12(3)(c) of the Companies Act, 2013, which mandates that the word "Limited" should form part of the name of every company limited by shares.
Show Cause Notices and Responses: Following the complaint, this office issued a Show Cause Notice on 12.10.2021. Upon investigation, UCCIL admitted the omission of the word “Limited” in the publication. Directors, including Shri Dhiren Kumar Dhal, stated that they were not consulted or informed regarding the publication and were unaware of the omission until after the advertisement was published.
Adjudication and Penalty Imposition: The Adjudicating Officer (A.O.) reviewed the matter and took into consideration the responses from the directors. On 14.01.2022, a penalty was imposed on the company and its directors, excluding Shri Dhiren Kumar Dhal, for their role in the violation. The A.O. concluded that the violation persisted from the date of publication (06.09.2021) until the date of the hearing (22.11.2021).
Appeal and Directorate’s Decision: The company and its directors appealed the penalty order to the Regional Director (Eastern Region), Kolkata. After hearing the appeal on 03.06.2022, the Directorate remitted the matter back to the Registrar of Companies (ROC) for reconsideration, stating that additional documents were not available during the initial adjudication process.
New Developments and Evidence Submitted: Following the remittance, UCCIL and its directors submitted new evidence, including:

Auditor’s certificate confirming that no expenses were incurred by the company for the advertisement.

Certificate from the organization that published the advertisement, confirming no charges were paid by UCCIL.

An undertaking from the advertising agency stating no costs were incurred by UCCIL for the advertisement.

Re-evaluation and Findings: After reviewing the new documents and considering the facts, this office notes the following:

The omission of the word “Limited” in the advertisement was a mistake, which, according to the company and its directors, was unintentional.

The company took prompt corrective measures by explaining the omission at the Annual General Meeting (AGM) and providing clarification in the subsequent submissions.

Directions: The Registrar of Companies, Odisha, is directed to:

Implement the revised penalty and ensure compliance with the provisions of the Companies Act, 2013.
Take necessary steps for the disposal of this matter, including any further actions or clarifications required from the company

Penalty Imposed
The ROC, after considering the responses, imposed a penalty of ?76,000 on per applicants for failure to make compliance under section 12(3(c) of the companies Act 2013.
The Regional Director, upon reviewing the appeal, set aside the ROC's order and remitted the matter back to the ROC, Odisha, for appropriate disposal under Section 454(3) of the Companies Act, 2013.
Conclusion
his case underscores the importance of meticulous attention to detail in corporate communications to ensure compliance with statutory requirements. The omission in this instance was unintentional, it serves as a reminder for companies to implement robust review mechanisms for all official publications. The ROC's decision to forgo penalties, considering the absence of malafide intent, highlights a balanced approach in regulatory enforcement, emphasizing corrective action over punitive measures in cases of genuine errors.
Download MCA Adjudication Order

Applicable Provision

Section 12(3)(c) of the Companies Act, 2013 mandates that every company must have its name, address of its registered office, Corporate Identity Number (CIN), along with telephone number, fax number (if any), email, and website addresses (if any) printed on all business letters, billheads, letter papers, notices, and other official publications. This ensures transparency and proper identification of the company in all official communications.

Facts of the Case <> ROC and RD

Introduction: This order is issued in response to the appeal filed by the company, Utkal Chamber of Commerce and Industry Limited (UCCIL), and its directors against the penalty imposed by this office for violation of Section 12(3)(c) of the Companies Act, 2013, as detailed in the Show Cause Notice (SCN) issued on 12.10.2021, and the subsequent order dated 14.01.2022. The issue pertains to the advertisement published in the Times of India on 06.09.2021, wherein the company’s name was printed without the word “Limited,” in contravention of the Companies Act.

Allegation and Initial Findings: The allegation raised by Shri Ashok Agrawal, Member of UCCIL, was regarding the joint advertisement published by UCCIL and another organization on 06.09.2021. The advertisement featured the company’s name as “Utkal Chamber of Commerce and Industry,” without the word “Limited.” This omission was deemed a violation of Section 12(3)(c) of the Companies Act, 2013, which mandates that the word "Limited" should form part of the name of every company limited by shares.

Show Cause Notices and Responses: Following the complaint, this office issued a Show Cause Notice on 12.10.2021. Upon investigation, UCCIL admitted the omission of the word “Limited” in the publication. Directors, including Shri Dhiren Kumar Dhal, stated that they were not consulted or informed regarding the publication and were unaware of the omission until after the advertisement was published.

Adjudication and Penalty Imposition: The Adjudicating Officer (A.O.) reviewed the matter and took into consideration the responses from the directors. On 14.01.2022, a penalty was imposed on the company and its directors, excluding Shri Dhiren Kumar Dhal, for their role in the violation. The A.O. concluded that the violation persisted from the date of publication (06.09.2021) until the date of the hearing (22.11.2021).

Appeal and Directorate’s Decision: The company and its directors appealed the penalty order to the Regional Director (Eastern Region), Kolkata. After hearing the appeal on 03.06.2022, the Directorate remitted the matter back to the Registrar of Companies (ROC) for reconsideration, stating that additional documents were not available during the initial adjudication process.

New Developments and Evidence Submitted: Following the remittance, UCCIL and its directors submitted new evidence, including:

Auditor’s certificate confirming that no expenses were incurred by the company for the advertisement.
Certificate from the organization that published the advertisement, confirming no charges were paid by UCCIL.
An undertaking from the advertising agency stating no costs were incurred by UCCIL for the advertisement.

Re-evaluation and Findings: After reviewing the new documents and considering the facts, this office notes the following:

The omission of the word “Limited” in the advertisement was a mistake, which, according to the company and its directors, was unintentional.
The company took prompt corrective measures by explaining the omission at the Annual General Meeting (AGM) and providing clarification in the subsequent submissions.

Directions: The Registrar of Companies, Odisha, is directed to:

Implement the revised penalty and ensure compliance with the provisions of the Companies Act, 2013.
Take necessary steps for the disposal of this matter, including any further actions or clarifications required from the company

Penalty Imposed

The ROC, after considering the responses, imposed a penalty of ?76,000 on per applicants for failure to make compliance under section 12(3(c) of the companies Act 2013.

The Regional Director, upon reviewing the appeal, set aside the ROC's order and remitted the matter back to the ROC, Odisha, for appropriate disposal under Section 454(3) of the Companies Act, 2013.

Conclusion

his case underscores the importance of meticulous attention to detail in corporate communications to ensure compliance with statutory requirements. The omission in this instance was unintentional, it serves as a reminder for companies to implement robust review mechanisms for all official publications. The ROC's decision to forgo penalties, considering the absence of malafide intent, highlights a balanced approach in regulatory enforcement, emphasizing corrective action over punitive measures in cases of genuine errors.