In one of our group company there was change in management of company. But old management did not provide accounts for audit and filling so statutory audit could not be held.
Due to this company has not been filling 23AC & ACA to ROC since 5 year but has been filling 20B in timely.
We held our AGM and filled annual return to ROC but due to above problem and also court case we could not file balance sheet to ROC.
My question is:- 1) can AGM is valid if oridinary business not completed i.e. adoption of annual account 2) If AGM is valid then how we show in minute and not valid then what is way to come out from this ? 3) Due to this auditor is also not appointed in AGM held so what can we do for the same ? 4) now we receive current year audited balance sheet so is it ok to fille the same or first clear back years returns
18 December 2013
Responsibility to ensure compliance with section 210 and penalty for non-compliance
Section 210(5) of the Act, provides that if any person, being a director of a company, fails to take all reasonable steps to comply with the provisions of this section, he shall, in respect of each offence, be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten thousand rupees, or with both. Provided that in any proceedings against a person as aforesaid, it shall be a defence to prove that a competent and reliable person was charged with the duty of seeing that the provisions of this section were complied with and was in a position to discharge that duty. Further provided that no person shall be sentenced to imprisonment for such offence unless it was committed willfully.
18 December 2013
Non-adoption of the Balance sheet at the annual general meeting and filing of the same
If the annual general meeting of a company before which a balance sheet is laid as aforesaid does not adopt the balance sheet, or is adjourned without adopting the balance sheet or, if the annual general meeting of a company for any year has not been held, a statement of that fact and of the reasons therefore shall be annexed to the balance sheet and profit and loss account required to be filed with the Registrar electronically in e-Form 23AC and 3-Form 23ACA— Section 220(2).
If the Balance sheet is not laid before the annual general meeting but filed with the Registrar, it will not be taken on record
It has been clarified by the Department that the balance sheets and profit and loss accounts which are not laid before an Annual General Meeting of the company but submitted to Registrar of Companies, for filing under section 220 of the Act would not be taken on record. The question of launching prosecution in such cases would be considered. [Vide Circular No. 4/74, dated 22-2-1974]
18 December 2013
Penalty for non-compliance of section 220 If default is made in complying with section 220(1) and (2), the company, and every officer of the company who is in default, shall be punishable with fine, which may extend to five hundred rupees for every day during which the default continues. [Section 220(3)] It has been held in the case of Ravindra Narayan v Registrar of Companies (1994) 2 SCL 281 (Raj), that where there is a managing director of company, other directors cannot be held to be falling within the expression 'officer who is in default' in section 5 and cannot be held liable for default in complying with requirements of sub-sections (1) and (2) of section 220. Where directors failed to file balance sheet and profit and loss accounts despite notice, it was decided that any director of the company who is knowingly guilty of the default would be an 'officer in default' under section 5 read with section 2(30). [Bachrenj Baid v State of West Bengal Case No. 809 (Kol) 92]. In the case of Alim Ahuja and Another v Registrar of Companies (2006) 129 Comp Cas 104 (Raj), the Registrar of Companies sent notices to the directors calling upon them to show cause as to why action should not be taken for their prosecution for contravention of section 159/160/162/220 and as to why they should not be prosecuted under Section 210(5) of the Act, for the default in complying with section 210(3) of the Act. On receipt of these notices, the petitioners filed application to High Court for grant of relief under section 633 of the Act instead of showing cause to the ROC praying that they were not active directors of the company and are being not connected with the management of the company. The Court held that that the plaintiffs have voluntarily continued as directors of the company. The Board of Directors has never resolved to exempt them from their responsibility and duty as directors to comply with the provisions of the Act. It is hardly of any substance that petitioners are senior citizens. They had accepted the directorship voluntarily and presumed to have known of their responsibility, obligation, liability and duty under the Act. It was further held that rather than approach to this Court at this stage they should have placed their cases for consideration before the respondent but that has not been done. That apart the notices have been given only for launching the prosecution against the petitioners and in their prosecution they can take all these defences and where they are able to prove the same the Court may not punish them for violation of provisions of the Act.
Its ok sir that there are penal provision under section 210 & 220. But still i am not clear on following that:-
a) is our AGM (in which were showing in annual return since last 5 year) is valid even then account not laid by board, no appointment of auditor in this AGM ?
b) if auditor not appointed since 5 year then 23B is also pending since 5 year ?
c) this year we audited balance sheet - what should we do. Should we file this year balance sheet or pl a/c or first file last 5 year balance sheet or pl which are not with us ?
CAclubindia
