SODECIA INDIA PRIVATE LIMITED WAS PENALISED FOR NOT APPOINTING COMPANY SECRETARY Rs 10 LACS FOR MORE THAN 5 YEARS
LEGAL REQUIREMENTS
Section 203(1) of the Companies Act, 2013
· Mandates appointment of Key Managerial Personnel
(including a Whole-Time Company Secretary) for certain classes of companies.
· Rule 8A of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014
· Requires every company with paid-up share capital ≥
₹10 crore to appoint a Whole-Time CS.
· Section 203(5)--Provides penalty for non-compliance.
FACTS OF THE CASE
· The company’s paid-up share capital exceeded ₹10
crore, triggering mandatory CS appointment.
· Despite this, the company failed to appoint a
Whole-Time CS for a prolonged period:
· Default period: 1,837 days / 2,045 days (approx. 5+
years)
· The company later regularized the default by
appointing a CS, but only after a long delay.
ROC CHENNAI FINDINGS
The Registrar held that:
·
The
requirement under Section 203 is mandatory, not procedural.
·
Subsequent
compliance does NOT wipe out past default.
·
Financial
hardship or operational issues are not valid defenses.
PENALTY
IMPOSED
·
₹5,00,000
on the Company
·
₹5,00,000
on the Officer in Default (Director/KMP)
·
Total
penalty: ₹10,00,000
·
Penalty to
be paid:
· By officers from personal funds (not company funds).
KEY TAKEAWAYS
·
Maintain a
KMP compliance tracker (CS, CFO, CEO).
·
Do not rely
on:
·
Financial
constraints
·
Administrative
delays
These are not acceptable defenses before ROC.
CONCLUDING REMARKS
·
Non-appointment
of a Company Secretary is treated as a serious governance failure, not a minor
procedural lapse.
·
It is a
clear reminder that Section 203 compliance is non-negotiable and
time-sensitive.
# YOUR COMPLIANCE PARTNER R V SECKAR, FCS, LLB 79047
19295,
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