ROC Penalises Directors for Failing to Hold Board Meetings Since Incorporation

The Registrar of Companies (ROC), Ranchi, issued a penalty order against a company and its director for not holding any board meetings ever since its incorporation, violating the relevant provisions of the Companies Act.

The company, Thakur Mediaworks Pvt Ltd, had violated section 173 of the Companies Act, 2013, which requires every company to hold the first Board of Directors’ meeting within 30 days of incorporation and at least four meetings annually, with a maximum of a 120-day gap between the two meetings. Failure to do the same attracts a penalty under section 173(4) of the Companies Act, which is levied on the officers of the company.

The said violation was found during the investigation of the registered office of the company. The investing officer noted that the company does not have any documents about holding the board meetings. After checking the records available at the MCA portal, the officer did not find any such documents proving that the company had held the meeting since its incorporation. As no documents were found, it was deemed that the company has not held any board meetings since incorporation.

Therefore, for violating section 173 of the Companies Act, 2013, the ROC levied a penalty of Rs 25,000 each on its two directors in default under section 173(4) of the Companies Act. The said penalty was required to be paid from the director’s personal income. The ROC directed the company to correct the mistake and pay the penalty amount within 90 days through the ‘e-Adjudication’ facility available on the MCA portal.