ROC imposes Penalty of Rs. 3.50 Lakhs for late filing of INC-20A

The Registrar of Companies in the matter of M/S PEARCE SERVICES GLOBAL PRIVATE LIMITED has imposed a Penalty of Rs. 3.50 Lakhs for late filing of INC-20A.

PEARCE SERVICES GLOBAL PRIVATE LIMITED (hereinafter referred to as “the Company”) is a company registered with this office under the Provisions of the Companies Act, 2013 (or previous Acts in force, as applicable) having its registered office situated at 801-B, C, D and E, 8th Floor, Block B, Bestech Business Tower, Sector-66, Mohali, Punjab, India, 160059.

Facts about the Case:

That, a complaint against the affairs of the company was received from Shri Tarun Sadana, CEO Kimoha Technologies Private Limited regarding violations of various provisions of the Companies Act, inter alia alleging that the Company has commenced business before filing declaration of business in Form 20A required under Section 10A of the Companies Act, 2013. Complaint Matter was taken up with the company and company replied that” In terms of Section 10-A, a company has to file the declaration with in a period of 180 days from the date of incorporation in Form INC-20A and there is no bar/prohibition on the company commencing business prior to filing the said form”. Thereafter, company and its directors have Suo-moto filed application vide GNL 1 (SRN No. f 64184500) for adjudication of penalty under the provision of Section 454 of the Act and rules thereunder and stated therein inter alia:

As per Section 1 0A, a company incorporated after the commencement of the Companies (Amendment) Act, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless-

(a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration: and

(b) the company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12.

As per application by the Company, it is observed that the Company has commenced its business on 17.05.2022. However, Declaration by Director in e-form INC-20A was filed on 24.09.2022 with a delay of 131 days thereby violating the provisions of Section 10A of the Companies Act, 2013 punishable under Section 10A(2) of the Companies Act, 2013.

Findings:

As per application by the Company, it is observed that the Company has commenced its business and operation as on 17.05.2022. However, Declaration by Director in e-form INC-20A was filed on 24.09.2022 with a delay of 131 days thereby violating the provisions of Section I 0A of the Companies Act, 2013 punishable under Section 10A(2) of the Companies Act, 2013.

Order:

That an opportunity of being heard in the matter was given to company and its Directors and accordingly Authorized Representative of the Company and Directors Sh.Rahul Malhotra, CS appeared before the undersigned regarding his submissions in the case on 27.10.2023 and he made submissions to impose minimum penalty in the case. However, maximum penalty prescribed in the Act has been imposed on the company and the Directors. Further, having considered the facts and circumstances of the case and after considering the factors above and submissions of the Applicant/ Representaive, hereby impose a penalty of Rs. 3.50 Lakhs as prescribed under Sub-Section (2) of Section 10A of the Companies Act, 2013.

Penalty is commensurate with the aforesaid failure committed by the Noticee and penalty so imposed upon the Officers-in-default shall be paid from their personal sources/income.

It is further directed that penalty imposed shall be paid through the Ministry of Corporate Affairs portal only as mentioned under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 under intimation to this office.

Appeal against this order may be filed in writing with the Regional Director (Northern Region), Ministry of Corporate Affairs, CGO Complex, Lodhi Road, New Delhi, within a period of sixty days from the date of receipt of this order, in Form ADJ setting forth the grounds of appeal and shall be accompanied by a certified copy of this order. [Section 454(5) & 454(6) of the Act, read with Companies (Adjudication of Penalties) Rules, 2014].

Attention is also invited to Section 454(8)(i) and 454(8)(ii) of the Companies Act, 2013, which state that in case of non-payment of penalty amount, the company shall be punishable with fine which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees and officer in default shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty five thousand rupees but which may extend to one lakh rupees or with both.

For Official Order Download PDF Given Below: