MCA Penalty on Private Limited Company for Not Maintaining Registered Office
The Ministry of Corporate Affairs (MCA) has recently imposed a penalty of ₹3 lakhs on a private limited company and its directors for failing to maintain its registered office. This action was taken under Section 12 of the Companies Act, 2013, which mandates every company to maintain a registered office capable of receiving communications.
Why Maintaining a Registered Office Is Mandatory
As per Section 12(1) of the Companies Act, every company must:
- Have a registered office within 30 days of incorporation
- Display its name and address at all business locations
- Ensure that the office can receive and acknowledge communications
- Keep office open during normal working hours
Failure to comply invites penalty under Section 12(8).
Key Details of the MCA Penalty
| Particulars | Details |
|---|---|
| Company Type | Private Limited Company |
| Default | No valid registered office found during visit |
| Legal Provision | Section 12(1) and 12(8) of Companies Act, 2013 |
| Penalty on Company | ₹1,00,000 + ₹1,000 per day (max ₹1 lakh) |
| Penalty on Each Director | ₹1,00,000 + ₹1,000 per day (max ₹1 lakh) |
| Total Maximum Penalty | ₹3,00,000 (Company + 2 Directors) |
📌 Source: Order issued by ROC under MCA compliance inspections, 2025.
What Triggers Such Penalty?
MCA conducts periodic inspections or acts on public complaints. In this case:
- The Registrar of Companies (ROC) visited the registered office address
- The company was not found operating from the declared address
- No documentation was available to prove its operation or shift
Section 12(8): Penalty Provision Explained
If a company fails to comply with any requirement under Section 12:
- Company and every officer in default is liable
- Penalty: ₹1 lakh + ₹1,000 per day (subject to a cap of ₹1 lakh each)
This provision ensures companies cannot exist on paper with dummy addresses.
Expert View:
“Many startups and small companies shift offices without updating ROC records, thinking it’s harmless. But the MCA treats it as a serious violation that affects legal correspondence and transparency.”
— CA D. Ramkumar, Compliance Consultant
How to Stay Compliant
To avoid such penalties, follow these steps:
✅ Ensure a valid office exists at the address declared in ROC filings
✅ Update Form INC-22 within 15 days of office change
✅ Display the company name and address board visibly
✅ Keep basic records and registers accessible at the premises
✅ Avoid using virtual offices that lack physical presence or proof
Related Legal Update
For detailed procedure on changing registered office, read our blog on shifting registered office within the same city.
FAQ – MCA Penalty for Not Maintaining Registered Office
Q1. What is the time limit to set up a registered office post-incorporation?
A: Within 30 days from incorporation, as per Section 12(1).
Q2. Can I use a co-working space as a registered office?
A: Yes, but it must be capable of receiving official correspondence and allow physical inspection.
Q3. What form must be filed to update a registered office?
A: File Form INC-22 within 15 days of change.
Q4. Will MCA give prior notice before inspection?
A: Not necessarily. Inspections can be surprise visits under Section 206 or 207.
Final Thoughts
MCA penalty on private limited company for not maintaining registered office is a reminder for all businesses to stay updated with basic compliance. Address changes, even if temporary, must be promptly reported to the ROC to avoid legal trouble.
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Summary
MCA imposes ₹3 lakh penalty on private limited company and directors for not maintaining registered office. Know your compliance duties under Section 12.