11 June 2013
A Pvt. Ltd Company had held its AGM on 30th Sept,2012,which was a Sunday.While fixing the date of the meeting,they did not check that it was a Sunday.After filing the Returns with the McA,they received a show cause notice from McA for violating the provisions of Section 166 of the Act.As a Consultant,please advise,what should be the proper explanation to the said notice?
11 June 2013
Sec 166 of the Companies Act, 1956 states that : Every annual general meeting shall be called for a time during business hours, on a day that is not a public holiday, and "shall be" held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate.
The words "shall be" are important. It means that the company must comply with the above provision.
I case of default, the company, and every officer of the company who is in default, "shall be" punishable with fine which may extend to 2[fifty] thousand rupees and in the case of a continuing default, with a further fine which may extend to 3[two thousand five hundred] rupees for every day after the first during which such default continues.
So, as such you have no option but to comply with the show cause notice.
But, if you are able to convince the Registrar that there were sufficient reasons beyond your control to hold the meeting, then he may provide relief.
11 June 2013
Ignorance of law may not work. ROC may be requested to compound the offence.However,if it was an adjourned meeting,then there would be no contravention of the Act vide Circular File No. 8/16(1)/61-PR of McA.
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