Introduction: Compliance is No Longer Optional
The financial year 2024–25 witnessed a sharp shift in how the Ministry of Corporate Affairs (MCA) enforces the Companies Act, 2013. With the advent of MCA Version 3, the Registrar of Companies (ROC) now relies on technology to monitor and enforce compliance in real time.
During this period, over eleven hundred adjudication orders were issued across India—many of which penalised routine defaults that were previously overlooked. From missed filings to overlooked governance processes, the message is clear: the law expects timely, accurate, and complete compliance, not just intent.
This post analyses key trends in adjudication orders, real company examples, and practical lessons for business owners, company directors, and professionals.
The New Enforcement Landscape under MCA Version 3
In July 2025, the MCA migrated thirty-eight statutory forms—including those related to annual filings, share capital, director appointments, and CSR compliance—to Version 3 of its portal. This new system does more than accept forms. It validates data, flags inconsistencies, and automatically triggers scrutiny when rules are not followed.
In this environment, non-compliance is no longer dependent on departmental inspection or third-party complaints. The system detects delays, omissions, and sequencing errors on its own. The result is a new regulatory reality: even technical defaults now attract penalties, and past practices are no longer safe.
Notable Adjudication Cases: What Went Wrong and Why It Matters
Several orders passed during the year stand out not because of their severity, but because of how common the defaults were. These real cases illustrate the kind of oversights that companies of all sizes are now being penalised for.
Non-compliance with outdated Articles of Association
Reflektion Media Software (India) Private Limited failed to maintain the minimum paid-up capital of one lakh rupees as specified in its Articles, despite the statutory requirement having been removed in 2015. The ROC held that company documents must reflect current law, and outdated clauses cannot be used as defence.
Failure to update altered Memorandum and Articles
In the case of Feranbraj Toll and Highway Private Limited, the company passed resolutions but did not update all copies of its constitutional documents, as required under Section 15. This led to penalties despite the underlying alteration being approved.
Appointment of directors without compliance with databank rules
Banswara Syntex Limited appointed an independent director without verifying whether the individual’s name was registered in the MCA databank at the time of appointment. Although the lapse was later corrected, the penalty was imposed for the period of non-compliance.
Director residency rules overlooked
SML Isuzu Limited appointed a foreign national as Whole-time Director without obtaining prior approval from the Central Government, even though the individual had not satisfied the residential status criteria. Penalty was imposed not for the current appointment but for the earlier term when approval had not been obtained.
These cases reflect a critical shift: the law now penalises lapses in process, not just in substance.
Common Areas of Non-Compliance: Emerging Patterns
Analysis of over a thousand orders passed in FY 2024–25 reveals certain recurring issues. These highlight the need for stronger internal controls.
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Registered Office issues under Section 12
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Delay in Annual Return and Financial Statements under Sections 92 and 137
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Non-reporting of beneficial ownership under Section 89 and Section 90
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CSR defaults under Section 135
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Appointment lapses under Section 203
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Share capital actions without following process under Sections 42, 62, and 56
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Use of circular resolutions in matters requiring board meetings under Section 179
Integrated ROC Compliance Checklist for FY 2025
To help companies strengthen governance and reduce the risk of adjudication, here is a practical compliance checklist based on recent enforcement trends. This can be used as a boardroom or internal audit tool.
Corporate Records and Governance
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Articles and Memorandum are up to date with the latest provisions
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Changes to MOA and AOA are reflected in all circulated copies
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Director appointments are made only after DIN activation and databank registration (where applicable)
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Resolutions under Section 179 are passed in board meetings and not by circulation
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Board composition complies with mandatory requirements including woman and independent directors
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Director Identification Numbers are correctly quoted in all filings
Annual Filings and Disclosures
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MGT-7 and AOC-4 filed within the prescribed timelines
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Financial statements are signed and include the auditor’s report
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Website disclosures under Section 92 are complete and updated
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Auditor’s report and Board’s Report are aligned with Accounting Standards and statutory requirements
Shareholding and Capital Actions
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All private placements comply with Section 42 timelines, fund utilisation rules, and PAS-3 filing
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Rights issues and convertible loans follow Section 62 processes with special resolutions where required
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Share certificates are issued within prescribed timelines under Section 56
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All shares of public companies are in dematerialised form as per Section 29
CSR and Beneficial Ownership
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CSR Committee constituted (where required) and meetings held
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Unspent CSR funds transferred within six months to designated accounts
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BEN-2 filed for all significant beneficial owners
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BEN-4 notices issued by the company to trace unreported SBOs
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MGT-6 and declarations under Section 89 filed for all beneficial interest changes
Registered Office and Contact Details
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Signboard at registered office is in local language and English
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CIN and address are mentioned on letterheads and invoices
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Company receives official communication at the registered office and responds timely
Key Managerial Personnel
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Whole-time KMPs appointed under Section 203 where applicable
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Board and shareholders have approved the terms of appointment
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Foreign nationals as KMPs have residential status verified and approval obtained if required
Compliance Is a Boardroom Responsibility, Not a Back-Office Task
These adjudication trends reveal one undeniable truth: the board of directors and senior management can no longer treat compliance as a secretarial function. Filing delays, ineligible appointments, outdated clauses, and missing disclosures now result in penalties on both the company and its officers in default.
To avoid such risks, companies must adopt a proactive compliance culture. This means:
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Reviewing governance documents regularly
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Mapping each MCA requirement to an internal accountability system
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Implementing maker-checker and deadline tracking mechanisms
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Conducting voluntary internal compliance audits even when not legally mandated
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Training directors and senior executives on the practical implications of the Companies Act
Conclusion: The Cost of Inaction Is Too High
The ROC’s enforcement pattern in FY 2024–25 sends a clear message. Compliance is no longer triggered by exception. It is monitored by default. Errors, even small ones, are now caught quickly, and penalties are real.
For companies that value reputation, investor confidence, and uninterrupted growth, the time to act is now. The cost of proactive compliance is far lower than the cost of retrospective rectification.
A well-governed company is no longer just desirable. It is the only sustainable model in the evolving regulatory landscape of Indian corporate law.
