MCA Slaps ₹1 Lakh Penalty on Company and Directors for Not Updating Registered Office Address

COURTKUTCHEHRY SPECIAL ON MCA’s CRACKDOWN ON COMPANIES VIOLATING REGD OFFICE RULES

MCA Slaps ₹1 Lakh Penalty on Company and Directors for Not Updating Registered Office Address

Failure to File INC-22 Leads to Legal Action Under Section 12 of Companies Act

MCA Tightens Compliance Rules, Warns Companies Against Ignoring Statutory Obligations

By Our Legal Reporter

New Delhi: January 07, 2026:

The Ministry of Corporate Affairs (MCA) has once again demonstrated its commitment to enforcing corporate governance standards by penalizing companies that fail to comply with statutory requirements. Recently, the MCA imposed a penalty of ₹1 lakh on a company and its directors for failing to intimate the Registrar of Companies (RoC) about the change in its registered office. This violation falls under Section 12(4) read with Section 12(8) of the Companies Act, 2013, which mandates companies to notify the RoC within 30 days of shifting their registered office.

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Background of the Case

• Inspection Ordered: The MCA conducted an inspection in 2019, during which officials found that the registered office of the company was closed.
• Vacated Premises: Enquiries revealed that the company had vacated the premises nearly a year earlier.
• Non-Filing of INC-22: Despite this, the company failed to file Form INC-22 on the MCA21 portal, which is the mandatory form for notifying changes in registered office.
• Prolonged Default: The default continued for more than six years, making it a serious breach of compliance obligations.

Legal Provisions Involved

• Section 12(1): Every company must have a registered office within 30 days of incorporation.
• Section 12(4): Any change in the registered office must be intimated to the RoC within 30 days.
• Section 12(8): Non-compliance attracts penalties on both the company and its officers.
• Section 128: Relates to maintenance of books of accounts, often linked to registered office compliance.

The MCA adjudication order made it clear that directors are personally liable for such defaults, reinforcing accountability at the management level.

Penalty Details

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• Company Penalty: ₹1,00,000 imposed on the company.
• Directors Penalty: Additional fines imposed on directors for their role in the default.
• Payment Timeline: Penalties must be paid within 90 days, with the right to appeal before the Regional Director.

This case is part of a larger trend where MCA has imposed penalties ranging from ₹1 lakh to ₹3.5 lakh on companies for various compliance failures, including failure to file board resolutions and maintain registered offices.

Why Registered Office Compliance Matters

• Legal Communication: The registered office is the official address for receiving legal notices and government communication.
• Transparency: It ensures stakeholders, creditors, and regulators can reach the company.
• Corporate Governance: Non-compliance raises questions about the company’s credibility and governance practices.
• Investor Confidence: Investors rely on accurate records of company addresses for due diligence.

Wider Implications

The MCA’s strict enforcement sends a clear message:

• No Tolerance for Defaults: Companies cannot ignore statutory obligations.
• Accountability of Directors: Directors will be held personally responsible for lapses.
• Strengthening Governance: Such actions improve transparency and protect stakeholders.

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This case also highlights the MCA’s increasing use of adjudication orders under Section 454 to enforce compliance.

Expert Opinions

Legal experts note that:

• Compliance Culture: Companies must build a culture of compliance to avoid penalties.
• Digital Filing: With MCA21 portal, filing forms like INC-22 is straightforward, and failure to do so reflects negligence.
• Risk of Prosecution: Continued defaults may lead to prosecution beyond monetary penalties.

Conclusion

The MCA’s penalty on the company and its directors for failing to intimate the change of registered office is a reminder that corporate compliance is non-negotiable. Companies must ensure timely filings, maintain transparency, and uphold governance standards to avoid legal consequences.

This case is not just about one company—it is a warning to all businesses operating in India. The MCA is watching, and non-compliance will be met with strict penalties.

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