Non Adherence to Secretarial Standards lands Companies in a soup ;ROC imposes penalty
The Companies Act, 2013 has entered into a maturity phase as its inception is over seven years. Secretarial Standards were introduced to plug in the gap that the Act did not provide for as a measure of good Corporate Governance.
Yet, the Corporate and Professionals still act as a novice observer in adhering to the Act and Rules and Standards.
The ROC whilst making an inspection u/s 206(5) of the Act, found major discrepancies in the maintainence of the Minutes of a Public Limited Company thereby imposing penalties in the following manner on the eight Directors ( excluding Independent Directors) and the Company:
25k on the Company, 5k on each Director for first Offence.
50k on the Company, 10k on each Director for a subsequent Offence.
Yet in another inspection another Company has been slapped with a penalty of Rs. 3.25lakh and Rs. 65k on the Directors.
To be specific, Corporates and Professionals should be aware that u/s 118(10), it is mandatory to follow the Secretarial Standards 1 and 2.
ROC orders show that MCA is showing the importance of total Compliance.