[Opinion] Non-disclosure in Form DIR-12 Leads to Penalties for Company & Directors by RoC

Prof R Balakrishnan – [2023] 150 taxmann.com 493 (Article)

1. Filing of e-form DIR-12 upon appointment of a director

Whenever a company appoints a director on its board, when a change in designation takes place of a director and also upon cessation, the Companies Act 2013 mandates that the intimation is required to be filed through online in the specified format of e-form DIR-12 at the portal of Ministry of Corporate Affairs by the company.

Whenever any director is appointed by the company or whenever any change takes place in the designation of a director, then e-Form DIR-12 containing such particulars and documents as may be prescribed in the form shall have to be filed with Registrar of Companies within 30 days from the date of appointment/resignation or the date of such change taking place.

2. Relevant provisions of the Companies Act 2013 relating to this case

In pursuant to sub-section (2) of section 170 of the Companies Act 2013 read with Rule 18 of the Companies (Appointment and Qualification of Directors) Rules 2014, that a return containing the details of securities held by each of them in the company or its holding, subsidiary, subsidiary of company’s holding company or associate companies of the directors and the key managerial personnel shall have to be filed with the Registrar of Companies within 30 days from the date of appointment of every director and key managerial personnel as the case may be and within thirty days of any change taking place.

3. Penal Provisions for default (if any) committed by the company

The relevant section for penal action is provided in section 172 of the Companies Act 2013 and the section reads that if a company is in default in complying with any of the provisions of this chapter (Chapter XI – Appointment and Qualifications of Director) and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.

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