Company Fails to Hold Minimum Number of Board Meetings Annually; Faces ROC Penalty

Company Fails to Hold Minimum Number of Board Meetings Annually; Faces ROC Penalty

The Registrar of Companies (ROC), Himachal Pradesh, has passed a penalty order against a company for violating Section 173(1) of the Companies Act.

The company, Tidong Power Generation Private Limited, held only three board meetings in the calendar year 2023 before 31.12.2023. However, Section 173(1) of the Companies Act requires every company to hold its first meeting within 30 days of incorporation, and a minimum of four meetings must be held annually, with a gap of 120 days between any two consecutive meetings.

Since the company failed to hold a minimum of four board meetings annually, the ROC held the company and its directors liable for a penalty under section 454. Accordingly, the ROC imposed a penalty of Rs 25,000 on the company and an equal penalty on each of its three directors.

The Registrar directed the company to correct the default and pay the penalty within 90 days through the e-adjudication facility available on the MCA portal.