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MCA introduces online Compliance Monitoring System (CMS): In relation to the below offences the Ministry of Corporate affairs has introduced an online Compliance Monitoring System ( https://mcacms.gov.in/ ) for issuing show cause notices and submitting replies from companies / directors for non-compliance under the Act.

The show-cause notice will mention the CMS reference number, details of non-compliances under the provisions of the Act and the timelines for submitting the reply. With reference to the above discussion on the Rules, the recipient of showcase notice has to submit reply at the portal referring the CMS Reference Number within 15 days from the date the notice.

Currently all forms and documents are e-filed with MCA. This gives visibility of technical compliance and if the forms are filed within the due dates. The notices will largely cover lapses which are technical in nature. This system will also reduce the visits to ROC/ MCA as companies will need to submit a reply digitally

 

Sr. No. Section3 Types of Offences
1. 10A Failure to file declaration before commencement of business
2. 53(3) Issue of shares at discount
3. 64(2) Failure to give Notice to Registrar of Companies for alteration of capital
4. 92(5) Penalty for default in filing annual return
5. 102(5) Not complying with provisions relating to Explanatory Statement annexed to the Notice of the general meeting
6. 105(3) If notice of general meeting does not indicate about the provisions of proxy.
7. 117(2)    Failure to file the resolution or the agreement u/s 117 of the Act before the expiry of the prescribed period.
8. 121(3) Failure to file the report of Annual General Meeting by listed public company.
9. 137(3) Failure to file financial statement within prescribed.
10. 140(3) Failure of the auditor (who has resigned from the company) to file within a period of 30 days from the date of resignation
11. 157(2) If company does not inform DIN to Registrar of Companies within 15 days
12. 159 Violation of provisions by director relating to DIN
13. 165(6) Not complying with the provisions relating to restriction on number of directorships
14. 191(5) Not complying with the provisions relating to payment to director for loss of office, etc.
15. 197(15) Contravention / non-compliances of provisions relating to payment of managerial remuneration (applicable to public companies only)
16. 203(5) Not appointing Key Managerial Personnel when mandatory (i.e. read with the Rules made there under)
17. 238(3) Violating provision of section 238(1)(c) in respect of circular for offer of scheme involving transfer of shares

 

(i) The adjudication process starts wherein the adjudicating officer shall issue a written notice, to the company, the officer who is in default or any other person, as the case may be to show cause, within a prescribed period (not being less than 15 days and more than 30 days), why the penalty should not be imposed on it or him. Therefore, the process for adjudication only commences on issue of show cause notice.
(ii) The reply to the show cause notice shall be filed in electronic mode only within the period as specified in the notice.
(iii) If, after considering the reply submitted by such company, its officer, the Adjudicating Officer is of the opinion that physical appearance is required, he shall issue a notice fixing a date for the appearance, whether personally or through his authorised representative.
(iv) The adjudicating officer shall send a copy of the order passed by him to the concerned company, officer who is in default or any other person or all of them and to the Central Government and a copy of the order shall also be uploaded on the website.
(v) While adjudging quantum of penalty, the Adjudicating Officer shall have due regard to the following factors, namely: (a) Size of the company, (b) Nature of business carried on by the company, (c) Injury to public interest, (d) Nature of the default, (e) Repetition of the default, (f) Amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default

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