The Ministry of Corporate Affairs (MCA) has declared ‘No Penalty’ on the delay in filing declaration Form INC-20A. The authority observed that the company has already filed suo-moto application for Strike-off under Section 248(2) of the companies Act,2013, hence “No-Penalty”.
M/s Squareroot Data Centers Private Limited failed to submit Form INC-20A within the designated 180-day timeframe. According to Section 10-A of the Companies Act, 2013, the company was required to file the declaration of commencement of business (INC-20A) within 180 days. Non-compliance with this requirement results in incurring a penalty. The company delayed in filing the same.
The Registrar of Companies (ROC) sent STK-I notices to both the company and its defaulting officers, urging action to remove the company’s name from the register of companies under Chapter XVIII. This action was taken due to the company’s failure to file a declaration with the ROC.
However, the company eventually submitted the declaration, albeit 220 days after the initial due date. As a result, the adjudication office has decided to dismiss the action to remove the company’s name from the register of companies.
A show cause notice was sent to the company and the authoritative representative submitted that during the financial year 2021-22, the company has not started business due to covid pandemic and the company & its directors has decided not to continue business activities as per the MOA.
The representative also stated that the company’s bank account has been closed and that the company does not possess any assets or liabilities. Furthermore, they mentioned that the company has already applied for strike-off under section 248(2) of the Companies Act, 2013, by submitting e-form STK-2 on April 4, 2023.
Furthermore, it was noted that the company is privately owned and the non-compliance does not have any impact on public interest. In light of this, the company representative requested a lenient approach, urging that no penalty be imposed considering the company’s application for strike-off and the circumstances surrounding the case.
The presenting officer mentioned that the Ministry, through a letter dated May 23, 2023, with reference number CL-II-03/211/2020-0/0 DGCOA-MCA, has instructed to submit proposals for striking off companies under Section 248 of the Companies Act, 2013. This instruction applies to cases where the company does not have a bank account and is not maintaining any assets or liabilities. These cases are categorised as special category cases (SPLCC).
Considering that the company has already closed its bank account and submitted an application for strike-off under section 248(2) of the Companies Act, 2013, it was suggested that a lenient approach be adopted, thereby avoiding the imposition of any penalty.
After reviewing the facts and circumstances, the undersigned Registrar of Companies (ROC) has formed a reasonable belief that the company and its officer(s) did not intentionally commit the violation of delayed filing of e-form 20A. It is deemed appropriate to consider their case favourably in the spirit of natural justice. Moreover, since the company has already filed a voluntary application for strike-off, it is recommended that no penalty be imposed.
The appeal may be filed before the Regional Director within 60 days of the receipt of this order.
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