[Case Study] Penalty for using the incorrect name of the company on its letterhead
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- Last Updated on 26 December, 2022
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[2022] 145 taxmann.com 560 (Article)
1. Background of this case
This is a classic case, where due to the mistake committed by the company in using the company’s name wrongly spelt out in their letterhead. The name of the company is Laxmidurga Constructions Private Limited while the letterhead used by the company showed the name as Lakshmidurga Constructions Private Limited. (the word Laxmi is printed as Lakshmi). This letterhead has been used by the company for their correspondence with all including in communicating with the Ministry of Corporate Affairs authorities as well.
As per the provisions of section 12 (3) (c) of the Companies Act 2013, every company shall have to use the name, its registered office along with corporate identity number correctly as per the incorporate certificate issued to the company in their business letters, bills and in all its notices and other official publications and correspondence.
The Registrar of Companies of Mumbai had followed the procedure of issuing show cause notice to the company, had the personal hearing on this matter and finally passed an order of adjudication for the violation of section 12 (3) (c) committed by the company and its directors as provided in section 12 (8) of the Companies Act 2013.
To understand the gravity arising out of the misspelt name of the company letterhead and the penalty the company and its directors/officers are required to face, we shall go through one of the decided case laws initially by the Registrar of Companies of Mumbai and also the subsequent appeal filed by the company against the order of the Registrar of Companies and the final outcome in the appeal-in-original order passed by the Regional Director (WR) Mumbai.
2. The relevant case law
The relevant case law is the order-in-original passed by the Regional Director (WR), Mumbai 2nd February 2021 in the matter of M/s Laxmidurga Constructions Private Limited of New Panvel, Navi Mumbai order bearing no. RD/WR/Sec.454 (5)/ Laxmidurga Constructions Private Limited/ R3607621/ 2020/3243 in the matter of Companies Act 2013; section 454(5) and we shall go through the same.
3. Name of the Company
Laxmidurga Constructions Private Limited is an unlisted public company incorporated on 13th April 1982 under the provisions of the Companies Act 1956 having a registered office at Shreekrishna, Plot No. 20/22, Road N. 16, Sector 19, New Panvel (East), Navi Mumbai in the state of Maharashtra. The company falls under the jurisdiction of the Registrar of Companies of Maharashtra and the officer of the Registrar is situated in Mumbai. The company currently have three directors. The Company is in the construction business.
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