In the Companies Act, 2013, an ‘Officer in Default’ refers to specific officers of a company who may be held liable for penalties or punishments in case of any provision violation. This article explores the categories of officers under this definition and delves into the requirements and documentation for their appointment in compliance with the Act.
As per Section 2(60) of the Companies Act, 2013, an Officer in Default includes Whole-Time Directors, Key Managerial Personnel, Directors specified by the Board, individuals responsible for company affairs, and others acting on the Board’s advice.
OFFICER IN DEFAULT
As Per Section 2(60) of the Companies Act, 2013,
“Officer who is in Default”, for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:—
(i) Whole-Time Director;
(ii) Key Managerial Personnel;
(iii) where there is no key managerial personnel, such director or Directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the Directors, if no director is so specified;
(iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default;
(v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity;
(vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance;
(vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer;
REQUIREMENT FOR APPOINTMENT OF OFFICER IN DEFAULT:
- Well defined Organizational chart of the Company and Plant;
- Well defined Role and Responsibilities of the BODs/HODs;
- List/Name of Head of Departments in the Company and all plants;
- Current Authorized Signatories in the all the Departments across the Company and all Plants;
- List of Digital Signature Certificates (DSC) of Authorized Officials/Officer/Signatories being used for filing. Ex. Tenders submission, ROC filing/Compliances, Income Tax filing/Compliances, Factory law returns/compliances, any other filing with government departments, etc;
- List of work in each department which are in the nature statutory compliance;
DOCUMENTATION FOR APPOINTMENT OF OFFICER IN DEFAULT
- Consent letter from every person designated as officer in default (in all departments) for the specific work and under specific provision of statutory law;
- Pass necessary Board Resolution / or give authority letter where Board Resolution is not required;
- Submission with / Intimation to concerned statutory authorities as per the requirement;
(ex, e-form GNL-3 with roc, Board Resolution/Authorization Letter with Income tax Authority at the time of filing, Board Resolution/ Authorization Letter for renewal of various licenses, Factory law compliances, submission of tenders from time to time, etc)
Author Bio
