Section 383a

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Querist : Anonymous

Querist : Anonymous (Querist)

28 January 2012 IF A COMPANY HAS A PAID UP CAPITAL OF RS 9 LACS AS ON 31/03/2011 , BUT AFTER THE PERIOD SAY ON 01/05/2011 IT INCREASED ITS PAID UP CAPITAL TO RS 12 LACS . NOW IS THEIR A NEED OF OBTAINING COMPLIANCE CERTIFICATE BY THE COMPANY FOR THE FINANCIAL YEAR 2010-11 & YA THE DATE OF SIGNING OF BOARD'S REPORT IS 01/09/2011 & AGM IS DUE ON 30/09/2011.????

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 January 2012 No need to obtain compliance certificate for the FY 2010-11 under section 383A of the Co's Act,1956.

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Jiten Gupta

Jiten Gupta (Expert)
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28 January 2012 A company need to check its paid up capital at the end date of Financial year in respect whether to obtain Compliance Certificate or not..

Regards
Jitendta Gupta

jitencs7@gmail.com

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Querist : Anonymous

Querist : Anonymous (Querist)

28 January 2012 DEAR JITENDRA & MR. CHACKRAPANI AS I HAVE
READ IN MY STUDY MATERIAL OF CS ( PROFESSIONAL) THE FOLLOWING IS GIVEN WITH REGARDS TO SECTION 383A AS BELOW:

"ACCORDING TO SUB RULE (1)OF RULE 3, EVERY COMPANY NOT REQUIRED TO EMPLOY WHOLE TYM SECRETARY U/S 383A (1) OF THE ACT & HAVING A PAID UP SHARE CAPITAL OF 10 LAC RS OR MORE SHALL OBTAIN A CERTIFICATE FROM A PCS .

FOR THE PURPOSE OF THIS PROVISO THE RELEVANT DATE FOR DETERMING THE PAID UP CAPITAL SHALL BE THAT ON WHICH BOARD REPORT IS SIGNED. FURTHER SUB RULE (2) OF RULE 3 PROVIDES THAT THE COMPLIANCE CERTIFICATE SHALL RELATE TO THE PERIOD PERTAINING TO THE FINANCIAL YEAR OF THE COMPANY . SO EVERY CO TO WHICH SEC IS APPLICAPBLE IS REQUIRED TO OBTAIN A COMPLIANCE CERTIFICATE FROM A PCS FOR THE FINANCIAL YEAR IN WHICH THE BOARD REPORT IS SIGNED ON OR AFTER 1 FEB 2001"

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 January 2012 Undoubtedly, the quoted 1st sentence of 3rd para is wrong. Please see the concerned rules in the link http://www.mca.gov.in/Ministry/actsbills/rules/TCCR2001.pdf

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Guest

Guest (Expert)

28 January 2012 Compliance certificate is not required to be obtained in your case.

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Querist : Anonymous

Querist : Anonymous (Querist)

30 January 2012 MR . CHACKRAPANI I WENT TO LINK PROVIDED BY YOU BUT IN THAT RULES NOTHING IS MENTIONED REGARDING THAT ON WHICH DATE THE PAID UP CAPITAL SHOULD BE CONSIDERED. PLS CLEAR MY DOUBT?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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23 July 2025 This is a very good and nuanced query regarding Section 383A of the Companies Act, 1956, particularly focused on whether the requirement of obtaining a Compliance Certificate is triggered by the paid-up capital at the end of the financial year or at the date of signing the Board's Report.

Let’s break it down clearly and resolve the confusion.

✅ Relevant Law Under Section 383A (Pre-Companies Act, 2013)
📌 Section 383A(1) & Rule 3 of Companies (Compliance Certificate) Rules, 2001:
If a company (not required to appoint a full-time Company Secretary) has a paid-up capital of ₹10 lakh or more, it shall obtain a Compliance Certificate from a Practising Company Secretary (PCS) for the relevant financial year.

✅ Key Rule – Rule 3(1):
“Every such company as on the last day of the financial year having a paid-up capital of ₹10 lakh or more shall obtain a Compliance Certificate…”

🎯 Conclusion in Your Case:
Paid-up capital as on 31/03/2011 = ₹9 lakhs

Increased to ₹12 lakhs on 01/05/2011 (i.e., after FY 2010–11 ended)

Therefore:

There is NO requirement to obtain a Compliance Certificate for FY 2010–11, because as on 31/03/2011, the paid-up capital was below ₹10 lakhs.

⚖️ Clarification on the Date of Paid-up Capital
There’s some confusion from study material citing the date of Board Report signing as the relevant date. However:

That interpretation is incorrect and not supported by the Companies (Compliance Certificate) Rules, 2001.

The Ministry of Corporate Affairs (MCA) and professional practice confirm that:

“The relevant date is the paid-up capital as on the last day of the financial year (i.e., 31st March)”

🧾 Supporting MCA Clarification
You can refer to the MCA Notification GSR 80(E) dated 1st February 2001, which introduced Rule 3(1) of the Companies (Compliance Certificate) Rules, 2001. The rule explicitly focuses on the capital as on the last day of the financial year.

✅ Final Summary:
Aspect Detail
FY End 31/03/2011
Paid-up Capital on that date ₹9 lakhs
Date of Increase 01/05/2011 (post FY-end)
Requirement of Compliance Certificate No, for FY 2010–11
Reason Capital was < ₹10 lakhs as of FY-end

📘 Practical Tip
For FY 2011–12 onwards, since the capital is above ₹10 lakh, the company will need to obtain a Compliance Certificate (unless exempted by later provisions or it becomes subject to full-time CS appointment).

Let me know if you'd like a draft of a board note or an auditor's explanation template to address this issue formally.

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