Companies Act 2013- Certification Costs Likely to Increase

CMA Navneet Kumar Jain

Certification of Documents to be filed with MCA needs extra caution by Professionals which may effect of increase in Certification costs. 

MCA has given the powers to CA, CMA and CS to certify various documents which are required to be filed with MCA. The main objective of the certification of documents is to ensure the authenticity and correctness of the documents and its fulfilment to various regulations under Companies Act 2014. The details of the documents where certifications are required are given in the table A.

Once can recall the letter issued by MCA where it had raised concerns over the quality of the certifications.

With the issue of General circular No 10/2014 dated 07/05/2014, MCA has clarified that the casual approach toward the certifications cannot be tolerated and the certifying professional will have to face the consequences for wrong certifications.

MCA has categorically stated that

“Where any instance of filing of documents, application or return or petition etc. containing false or misleading information or omission of material fact or incomplete information is observed, the Regional Director or the Registrar as the case may be, shall conduct a quick inquiry against the professionals who certified the form and signatory thereof including an officer in default who appears prima facie responsible for submitting false or misleading or incorrect information pursuant to requirement of above said Rules; 15 days’ notice may be given for the purpose.”

The MCA seems to be determined to penalise the professional who are casual in their approach. Certification of forms for petty fees may decline as the professionals will have to devote proper time to review the forms before certifications.

The wordings used by MCA are “Quick Inquiry against the professionals…. Including an officer in default”. It means that not only the professionals will be in trouble for wrong certifications but company officials may also have to face inquiry. Only fifteen days’ notice will be given for explanation etc.

The Regional Director or Registrar of Companies has to submit his report to the EGov Cell of MCA within 15 days of the expiry of period given for submission of an explanation with recommendation in initiating action u/s 447 and 448 of the Companies Act, 2013 wherever applicable.

The Inquiry officer has to give recommendation regarding referral of the matter to the concerned professional Institute for initiating disciplinary proceedings.

The intentions of MCA are very clear

“Professionals, Be professional in certifications or face Disciplinary Proceedings”

N.B. Professionals mean CA/CMA/CS

Table A