MCA Penalises Private Limited Company & Directors for Furnishing Incorrect Information in Board's Report [Read Order]

In the adjudication order passed by the Ministry of Corporate Affairs (MCA) Registrar of Companies under Section 454 of the Companies Act, 2013, a penalty of Rs. 2.25 lakhs was imposed for furnishing incorrect information in the board’s report for the financial year (FY) 2021-22.

In this case, the company, Be Bold & Confident Careers Private  Limited, was incorporated on 18-1-2008 and has a paid-up capital of Rs . 10.7 lakhs.

Coming to the facts of the present case, an inquiry was initiated by the Ministry of Corporate Affairs (MCA) under Section 206(4) of the Companies Act, 2013. The investigation stemmed from a complaint lodged by Mr Amit Ahuja of Sangrur on 9-10-2021, alleging financial malpractices by the company and its directors.

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The inquiry revealed discrepancies between the company's filings, as the MGT-7A for FY 2021-22 reported six board meetings, while the board's report mentioned only five. This inconsistency led to the issuance of a show-cause notice (SCN) to the company and its officers on 30-10-2024.

The company filed a reply to the above-mentioned SCN stating an unintentional oversight. The Registrar of Companies (RoC) found the explanation unsatisfactory, noting that the violation of Section 134 was evident from MCA records and could not be ignored.

Section 134 of the Companies Act, 2013, deals with financial statements, Board Reports, etc.

Finally, the adjudicating authority reached a firm conclusion that the company and its directors violated the provisions of Section 134 of the Companies Act, 2013, and were liable to pay a penalty under the provisions of Section 134(8) of the Companies Act, 2013. 

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Regarding the penalty that has to be imposed, Section 134(8) of the Companies Act, 2013, states that “If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees, and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees."

A penalty of Rs 1.5 lakhs was imposed on the company alone, and a penalty of Rs 25,000 each was imposed on the 3 directors of the company under default.

The order was issued by Kamna Sharma, Registrar of Companies & Adjudicating Officer, Punjab & Chandigarh.

To Read the full text of the Order CLICK HERE

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