What is the penalty for Non-Maintenance of Registered Office of the Company

What is the penalty for Non-Maintenance of Registered Office of the Company. We know that after company registration with MCA, every company should have to situate its registered office as per section 12 of the companies Act 2013 within 30 days from the date of incorporation and also in case of change of registered office or in any circumstances, company supposed to file INC-22 within 30 days with MCA after payment of prescribed fees.
MCA e Form INC-22 is required to be filed pursuant to Section 12 (2) & 12 (4) of the Companies Act, 2013 and rule 25 & 27 of the Companies (Incorporation) Rules, 2014.
Now, if any default is made in complying with the requirements of this section 12 of the Companies Act 2013, the company and every officer who is in default shall be liable to a penalty of one thousand   rupees for every day during which the default continues but not exceeding one lakh rupees.
Extract of section 12 of the companies Act 2013

A company shall, within thirty days of its incorporation and at all times, thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.

The company shall furnish to the Registrar verification of its registered office within a period of thirty days of its incorporation in such manner as may be prescribed.

Every company shall—

1. Paint or affix its name, and the address of its registered office, and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in a conspicuous position, in legible letters, and if the characters employed therefor are not those of the language or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages;
2. Have its name engraved in legible characters on its seal, if any.
3. Get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications; and
4. Have its name printed on hundies, promissory notes, bills of exchange and such other documents as may be prescribed:
(4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within fifteen days of the change, who shall record the same.
Facts About of the case:
It is noticed that the company Build con finance limited has filed e-form INC 22 (Notice of situation or change of situation of registered) vide SRN: AA9144005 dt 03.07.2024 to change the registered office of the company from Ramlakhan Chamber, 3rd Floor, Suit No. 312, 19/20, General Mutahi Street, Sow carpet, Chennai, Tamil Nadu 600079 to RMZ
Millenia Businees Park, Campus IA, No. 143, Dr. M.G.R. Road (North Veeranam Salai), Perungudi, Sholinganallur, Perungudi, Kanchipuram, Saidapet, Tamil Nadu 600096. As per the form INC-22 the present address of the registered office of the company is situated with effect from 21.06.2024.
The notice was issued to the company's old address on 18.03.2024 and the same was returned/undelivered, which denotes that the company failed to maintain its registered office as required under Section 12 of companies act, 2013 for the period from 18.03.2024 (Notice date) to 20.06.2024 (the present address of the registered office of the company is situated with effect from 21.06.2024 as per INC-22). Hence, the company and Officers in default are liable for penal action under section 12(8) of Companies Act, 2013.
Adjudication of Penalty
A complaint has been received from Shri. Navratan Nahar vide letter dated 09.02.2024 against the company Build con Finance Limited. On receipt of the complaint, Registrar of Companies, Chennai had issued notices to the company and its directors under Section 206(1) of the Companies Act, 2013 on 18.03.2024. But the notice issued on 18.03.2024 to the company have returned/undelivered, which denotes that the company is not functioning at its registered address and failed to maintain its registered office as required under Section 12 of companies act, 2013. Hence, the company and Officers are in default and rendered themselves liable for penal action under section 12(8) of Companies Act,2013.
None of the representative of the Company or Directors have appeared on the date so fixed. Hence, as per Rule 3(8) of Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons (ex-parte).
After considering facts, circumstances and submissions made by the authorised representative on the behalf of the company, the concerned ROC imposed the penalty u/s 12(8) as follows: -

To whom penalty imposed

Period of default

Per day penalty for default

Total Penalty

Maximum Penalty

Penalty Imposed

On Company

95 days

1,000

95*1000=95,000

1,00,000

95,000

On 1st director

95 days

1,000

95*1000=95,000

1,00,000

95,000

On 2nd director

95 days

1,000

95*1000=95,000

1,00,000

95,000

On 3rd director

95 days

1,000

95*1000=95,000

1,00,000

95,000

More, learn here what should be on a company letter head and compliance of Letterhead and Company Boards requirements Under Section 12 of the Companies Act 2013.
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 MCA adjudication order of Build Con Finance Limited company is a Public limited company, the benefits of small company are not extended to this company while adjudicating the penalty
Takeaways:-
Based on the above facts and adjudication, it is evident that Build Con Finance Limited failed to maintain its registered office as required under Section 12 of the Companies Act, 2013, for the period from 18.03.2024 to 20.06.2024. Despite notices issued by the Registrar of Companies, the company did not rectify the default within the stipulated time, leading to the imposition of penalties under Section 12(8) of the Act. Since the company is a public limited entity, it does not qualify for the benefits of Section 446B, which provides relief to small companies and start-ups. Consequently, the penalties have been levied as per the prescribed provisions, holding the company and its officers liable for non-compliance.
Download ROC Order

We know that after company registration with MCA, every company should have to situate its registered office as per section 12 of the companies Act 2013 within 30 days from the date of incorporation and also in case of change of registered office or in any circumstances, company supposed to file INC-22 within 30 days with MCA after payment of prescribed fees.

MCA e Form INC-22 is required to be filed pursuant to Section 12 (2) & 12 (4) of the Companies Act, 2013 and rule 25 & 27 of the Companies (Incorporation) Rules, 2014.

Now, if any default is made in complying with the requirements of this section 12 of the Companies Act 2013, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees.

Extract of section 12 of the companies Act 2013

A company shall, within thirty days of its incorporation and at all times, thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it.
The company shall furnish to the Registrar verification of its registered office within a period of thirty days of its incorporation in such manner as may be prescribed.
Every company shall—

2. Have its name engraved in legible characters on its seal, if any.

3. Get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, billheads, letter papers and in all its notices and other official publications; and

4. Have its name printed on hundies, promissory notes, bills of exchange and such other documents as may be prescribed:

(4) Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within fifteen days of the change, who shall record the same.

Facts About of the case:

It is noticed that the company Build con finance limited has filed e-form INC 22 (Notice of situation or change of situation of registered) vide SRN: AA9144005 dt 03.07.2024 to change the registered office of the company from Ramlakhan Chamber, 3rd Floor, Suit No. 312, 19/20, General Mutahi Street, Sow carpet, Chennai, Tamil Nadu 600079 to RMZ

Millenia Businees Park, Campus IA, No. 143, Dr. M.G.R. Road (North Veeranam Salai), Perungudi, Sholinganallur, Perungudi, Kanchipuram, Saidapet, Tamil Nadu 600096. As per the form INC-22 the present address of the registered office of the company is situated with effect from 21.06.2024.

The notice was issued to the company's old address on 18.03.2024 and the same was returned/undelivered, which denotes that the company failed to maintain its registered office as required under Section 12 of companies act, 2013 for the period from 18.03.2024 (Notice date) to 20.06.2024 (the present address of the registered office of the company is situated with effect from 21.06.2024 as per INC-22). Hence, the company and Officers in default are liable for penal action under section 12(8) of Companies Act, 2013.

Adjudication of Penalty

A complaint has been received from Shri. Navratan Nahar vide letter dated 09.02.2024 against the company Build con Finance Limited. On receipt of the complaint, Registrar of Companies, Chennai had issued notices to the company and its directors under Section 206(1) of the Companies Act, 2013 on 18.03.2024. But the notice issued on 18.03.2024 to the company have returned/undelivered, which denotes that the company is not functioning at its registered address and failed to maintain its registered office as required under Section 12 of companies act, 2013. Hence, the company and Officers are in default and rendered themselves liable for penal action under section 12(8) of Companies Act,2013.

None of the representative of the Company or Directors have appeared on the date so fixed. Hence, as per Rule 3(8) of Companies (Adjudication of Penalties) Rules 2014, the matter is being proceeded with in the absence of such persons (ex-parte).

After considering facts, circumstances and submissions made by the authorised representative on the behalf of the company, the concerned ROC imposed the penalty u/s 12(8) as follows: -

To whom penalty imposed	Period of default	Per day penalty for default	Total Penalty	Maximum Penalty	Penalty Imposed
On Company	95 days	1,000	95*1000=95,000	1,00,000	95,000
On 1st director	95 days	1,000	95*1000=95,000	1,00,000	95,000
On 2nd director	95 days	1,000	95*1000=95,000	1,00,000	95,000
On 3rd director	95 days	1,000	95*1000=95,000	1,00,000	95,000

More, learn here what should be on a company letter head and compliance of Letterhead and Company Boards requirements Under Section 12 of the Companies Act 2013.

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 MCA adjudication order of Build Con Finance Limited company is a Public limited company, the benefits of small company are not extended to this company while adjudicating the penalty

Takeaways:-

Based on the above facts and adjudication, it is evident that Build Con Finance Limited failed to maintain its registered office as required under Section 12 of the Companies Act, 2013, for the period from 18.03.2024 to 20.06.2024. Despite notices issued by the Registrar of Companies, the company did not rectify the default within the stipulated time, leading to the imposition of penalties under Section 12(8) of the Act. Since the company is a public limited entity, it does not qualify for the benefits of Section 446B, which provides relief to small companies and start-ups. Consequently, the penalties have been levied as per the prescribed provisions, holding the company and its officers liable for non-compliance.