ROC Delhi Penalises Company for Delay in Filing Form MGT-14 and PAS-3
The Registrar of Companies (ROC) has recently imposed a penalty on Hexafun Private Limited and its two directors for the non-compliance during a private placement of Compulsorily Convertible Debentures (CCDs) in December 2023.
The company passed a Special Resolution at the Extraordinary General Meeting held on 15.12.2023 to issue 200 CCDs. It received the subscription money on 19.12.2023, and it allotted the 200 CCDs by the passing board resolution dated 19.12.2023. Section 42(3) of the Companies Act, 2013 requires the company to issue a private placement offer letter only after the relevant Special resolution or after filing the Board resolution in the Registry. However, it circulated the private placement offer letter before filing e-Form MGT-14. The said form was filed on 12.02.2024.
Additionally, Section 42(4) states that companies must not use the money raised through private placement until they file PAS-3 with the ROC. However, the company violated this section, as it used the funds before filing such forms. This led to a liability under section 42(10) of the CA, 2013. The ROC considered that the company is a startup and a “small company,” which reduced the penalty amount.
Due to this non-compliance, the company was penalised with Rs 2,00,000 and its two directors were penalised for Rs 1,00,000 each. Their director was not penalised because she joined after the violations had happened.
The company and its directors are required to correct the default and pay the above penalty within 90 days through the ‘e-Adjudication‘ portal on the Ministry of Corporate Affairs (MCA) website using their login IDs. They must also upload proof of payment on the same portal.
The company or its directors are allowed to file an appeal within 60 days to the Regional Director, RD Noida, using Form ADJ along with a certified copy of the order.
