In the matter of M/s Emperium Constructions Private Limited
The Registrar of the company (“RoC”) is taking strict action against the companies for every single non-compliance. Apart from additional fees automatically imposed while uploading late forms, the RoC is also imposing penalties on every crime.
Similarly, in the case of M/s Emperium Constructions Private Limited (“The Company”), it is incorporated in the state of Delhi. The Company filed Form INC-20A (intimation for commencement of business) after a 9 9-day delay. The Company filed an application in Form GNL-1 for the adjudication of penalties for default u/s 10A of the Act. The Company admitted that it filed Form GNL-1 with a delay of 9 days. Accordingly, RoC Delhi imposed a penalty of INR 50,000 on the company and INR 9,000 on each of the directors of the company.
The details of the case are as follows:
1. Brief Facts of the case:
- M/s Emperium Constructions Private Limited (“The Company”) is incorporated under the Companies Act, 1956, and has a registered office in Delhi.
- The Company had paid up share capital of INR 1,00,000/-.
- The RoC receipt application in Form GNL-1 was filed by the company for the adjudication of penalties for default u/s 10A of the Act.
- The Company was incorporated on 16.11.2021, and in terms of the provision of Section 10A, the company was required to file form INC-20A on or before 15.05.2022 (i.e., within 180 days from the date of incorporation).
- However, the company failed to file the said e-form on the due date, and filing was made vide SRN on 03.06.2022 with a delay of 19 days.
- Accordingly, a show cause notice was issued to the company and its officer wherein the company reiterated the facts and assured that they will be more vigilant and conscious and shall ensure due care in complying with the provisions of law in the future.
2. Relevant Legal Extract
The Relevant provisions of the Companies Act, 2013, are reiterated below for ready reference:
Section 10A is reiterated below:
“Section 10A Commencement of business etc.
- 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 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
- The company has filed with the Registrar a verification of its registered office as provided in subsection (2) of section 12.
(2) If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.”
Read Also: RoC Imposed Penalty on Listed Company for Failure to Appoint Women Director
3. Finding and Analysis by Hon’ble RoC
The RoC Delhi made the following analysis:
- After considering all the facts, it is noted that the company has violated provisions of Section 10A(1) of the Act, and the same has been admitted by the company as well.
- Therefore, the company is subject to the penal provisions given under Section 10A(2) of the Act.
- The subject company is not covered under the purview of a small company as defined u/s 2(85) of the Act. Hence, the benefit of section 446B would not be applicable to the company.
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4. Penalty Imposed:
The Hon’ble RoC imposed the following penalty for violation of Section 10A, i.e., delayed filing of Form INC 20A :
| Persons on whom penalty is imposed | Amount of penalty imposed u/s 10 A(2) of the Act | Penalty Imposed(in INR) |
| The Company | 50,000 | 50,000 |
| Director 1 | 1,000 * 9 (period of Delay)= 9,000 Subject to Maximum of INR 1,00,000 | 9,000 |
| Director 2 | 1,000 * 9 (period of Delay)= 9,000 Subject to Maximum of INR 1,00,000 | 9,000 |
| Total Penalty | 68,000 |
5. Conclusion
The RoC is getting stringent with every passing day. The Companies are already liable to pay additional fees for delayed filing of Forms. However, the RoC is still imposing penalties on the Company and its directors for delayed filings. These days, companies are required to be more vigilant about every employee. A compliance which may seem non-significant to the company can result in extensive penalties on both companies and its directors.
