NON APPOINTMENT OF A COMPANY SECRETARY-₹15 LAKH PENALTY --- DIRECTORS HELD PERSONALLY LIABLE DESPITE COMPANY DISSOLVED VIA NCLT ORDER SUBSEQUENTLY

 NON APPOINTMENT OF A COMPANY SECRETARY-₹15 LAKH PENALTY --- DIRECTORS HELD PERSONALLY LIABLE DESPITE COMPANY DISSOLVED VIA NCLT ORDER SUBSEQUENTLY

ROC CUTTACK Vs SAV INDUSTRIES PRIVATE LIMITED

FACTS OF THE CASE

The company failed to appoint a Whole-Time Company Secretary as mandated under Section 203(1)(ii) read with Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, despite meeting the applicable paid-up capital threshold Rs 10 Crores.

DISSOLUTION

The company was subsequently dissolved via NCLT order.

OBSERVATION OF ROC

1. Default was established based on MCA records.

2. Non-response to SCN indicated acceptance of default .

3. DISSOLUTION OF COMPANY DOES NOT ABSOLVE  DIRECTORS OF LIABILITY FOR DEFAULTS DURING TENURE PER SECTION 203(5).

DECISION BY CUTTACK ROC

Penalty of ₹5,00,000 imposed on each of the 3 directors. Total penalty: ₹15,00,000. Amount payable from personal funds within 90 days from order date.

KEY TAKEAWAYS FOR BUSINESSES & DIRECTORS

1. KMP COMPLIANCE IS NON-NEGOTIABLE:

 Paid-up capital ≥ ₹10 crore triggers mandatory Whole-Time CS appointment

2. LIABILITY SURVIVES DISSOLUTION:

DIRECTORS REMAIN PERSONALLY LIABLE FOR PAST

 DEFAULTS .

3. RESPOND TO SCN:

Ignoring notices leads to maximum penalty under

 adjudication

4. PROACTIVE COMPLIANCE SAVES LAKHS:

 Regular secretarial audits prevent such orders and heavy fines.

# YOUR COMPLIANCE PARTNER R V SECKAR, FCS, LLB 79047 19295,