In a significant development, the Registrar of Companies (RoC) at the Ministry of Corporate Affairs (MCA) has taken decisive action against Solis Pharmachem Private Limited, imposing a penalty of Rs. 20 Lakhs for the non-appointment of a Company Secretary (CS).
During the course of due diligence undertaken by the present management a the time of acquisition of control over the business and management of the Company rom erstwhile Board of Directors, it was identified that, the paid-up share capital of the company pursuant to the allotment of equity shares made on 13-12-2021 was increased to Rs. 10,60,93,500/-.
As a result of the said allotment, the Company was required to appoint the Whole-time Company Secretary as per the provision of Section 203 of the Companies Act, 2013 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel Rules, 2014.
Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 states that, every Private Company which has paid-up share capital of Ten crore rupees
or more shall have a whole time company secretary but the Company has failed to appoint a Whole-time Company Secretary.
The authorized share capital stands at Rs. 25,00,00,000, with the issued, subscribed, and paid-up share capital amounting to Rs. 24,75,79,000. The presenting officer had brought forth the violation of Section 203 of the Companies Act, 2013, during the financial year 2022-23 and 2023-24.
Thus, in light of Companies (Specification of definition details) Amendment Rules, 2022 with respect to the provisions of Section 2(85) of the Companies Act, 2013, the company does not fall under the ambit of “small company”. Therefore, the provisions of imposing lesser penalty as per the provisions of Section 446B of the Companies Act, 2013 shall not be applied to the company.
The adjudicating officer, considering the company’s financials and the nature of the default, has imposed a penalty of Rs. 17.12 Lakhs. The penalty took into account factors such as disproportionate gain, loss to investors, and the repetitive nature of the default.
The company and its officers are directed to rectify the default promptly. Failure to comply may lead to further action under Section 454A of the Companies Act, 2013. To facilitate compliance, the penalty must be paid individually by the company and its officers from personal sources/income within 60 days of receiving this order.
M/s Solis Pharmachem Private Limited was urged to address the non-compliance promptly to avoid further legal repercussions and this penalty serves as a stern reminder to companies about the importance of compliance with regulatory requirements.
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