“In business, precision in company law forms is the bedrock of legal compliance and corporate credibility of reality.”
Introduction: In the intricate realm of company law, precision in filling out ROC forms stands as the cornerstone of legal compliance and corporate integrity. A recent notification by the Ministry of Corporate Affairs (MCA) on February 2, 2024, introduces a pivotal change – the establishment of the Central Processing Centre (CPC). This move aims to optimize the capacities of Regional Directors and Registrars of Companies, specifically for governance, penalty, and scrutiny matters. Read: MCA Establishes Central Processing Centre at Manesar for E-Forms
The ministry has launched the fourth center to focus on specific areas of filing non-straight through process or non-STP forms. List is as follows:
i. CRC (Central Registration Centre): For incorporation-related matters.
ii. CSC (Central Scrutiny Centre): For the scrutiny of Straight Through Process (STP) forms.
iii. C-PACE (Centralized Processing for Accelerated Companies Exit): For closure/strike off of companies.
iv. CPC (Central Processing Centre): For processing of various e-forms.
KEY TAKE AWAY FROM NOTIFICATION:
Processing and Disposal of E-Forms: According to the Companies (Registration of Offices and Fees) Rules, 2014, the Central Processing Centre is obligated to process and dispose of electronic forms that are submitted when they are accompanied by the specified fee.
Jurisdictional Impact: While the Central Processing Centre is in charge of electronic forms, the jurisdictional Registrars (with the exception of the Registrar of the Central Processing Centre) will continue to have authority over companies in regard to all other provisions of the Companies Act, 2013, as well as the rules contained within it.
Effective Date: The notification is set to come into effect from the 6th of February 2024, signifying a shift in the processing dynamics of e-forms.
Purpose of New Department:
Increase Scrutiny?
owing to the fact that the responsibility of the Registrar of Companies has been relocated to the CPC by means of this announcement. It’s possible that the ROC will shift their attention to the monitoring of companies’ compliances. Due to this, they will have a strong focus on being scrutinized.
Increase in Adjudication Matters?
Over the course of the two most recent years, we have witnessed an increase in the number of adjudication orders and penalties. As a result of this change, the load that the ROC has to bear in respect to the review of electronic forms will be reduced. It’s possible that the ROC may raise the number of adjudication orders and put more of their attention on monitoring whether companies are complying with the law.
From this point forward, the company ought to exercise increased caution regarding compliance in order to avoid incurring penalties.
Same SOP for all forms?
Now that the CPC has taken over all of the non-STP forms, it will be easier to develop a standard operating procedure (SOP) that is comparable for all of the forms across the country. Earlier, there was a problem associated with the fact that various ROCs held varying perspectives regarding the law, compliance, and process. Now, that will be simplified, and it will be used in a manner that is comparable across all of the states. At this point, all forms are to be approved, resubmitted, or rejected based on the same lines and interpretation. Professionals will be able to guide companies across the country on similar grounds with the use of this information.
Conclusion:
Establishing the Standard Operating Procedure (SOP) and developing Corporate Governance in the country is a commendable initiative on the part of the Ministry of Corporate Affairs. Now, the ROC ought to place a greater emphasis on the checking of compliances, the vetting of applications, and the issuance of notices to companies that are not complying with the terms of the Act.
*****
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at [email protected]).
Disclaimer: The entire contents of this document have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information.
IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION
Author Bio
