26/02/2026
MyFinanceGyan
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Company Law

Common ROC Penalties in India: A Practical Guide for Companies and Directors

Compliance with the Registrar of Companies (ROC) is a mandatory requirement for every company registered in India. However, many startups and small businesses unintentionally fall into non-compliance due to missed deadlines, incorrect filings, or lack of procedural awareness. These lapses can result in monetary penalties and other legal consequences under the Companies Act, 2013.

Understanding the most common ROC penalties in India helps directors, founders, and compliance professionals safeguard their companies from financial loss, reputational damage, and legal complications.

What Is the ROC and Why Compliance Matters?

The Registrar of Companies functions under the Ministry of Corporate Affairs (MCA). It is responsible for administering company law, monitoring statutory filings, and ensuring corporate governance standards are upheld.

Non-compliance with ROC requirements can lead to:

Monetary penalties
Director disqualification
Legal proceedings
Increased regulatory scrutiny
Damage to business credibility

For any company, maintaining ROC compliance is not optional—it is foundational.

Why Do Companies Incur ROC Penalties?

Most penalties are not the result of intentional misconduct but arise from procedural lapses. Common causes include:

Missing statutory deadlines
Filing incomplete or inaccurate forms
Weak internal compliance systems
Poor record maintenance
Limited understanding of regulatory obligations

Regardless of intent, the law imposes penalties for non-compliance. Preventive action is therefore essential.

Common ROC Penalties in India:

Below are some of the most frequently encountered ROC penalties.

1. Late Filing of Annual Return (Form MGT-7):

Every company must file its annual return in Form MGT-7 within 60 days of the Annual General Meeting (AGM).

Penalty:

₹100 per day of delay
Maximum ₹5,00,000 for the company
Officers in default may also face penalties

This is among the most common ROC defaults, particularly for private limited companies and startups.

2. Late Filing of Financial Statements (Form AOC-4):

Companies must file financial statements within 30 days of the AGM using Form AOC-4.

Penalty:

₹100 per day of delay
Maximum ₹5,00,000 for the company
Additional penalties for responsible officers

Delays often occur due to postponed audits or incomplete accounts.

3. Failure to Conduct Annual General Meeting (AGM):

Except for One Person Companies (OPCs), all companies must hold an AGM within prescribed timelines.

Penalty:

Up to ₹1,00,000
Additional ₹5,000 per day for continuing default
Personal liability of directors

This is considered a serious compliance breach.

4. Non-Filing of DIR-3 KYC:

Directors must complete DIR-3 KYC annually to validate their Director Identification Number (DIN).

Consequences:

DIN deactivation
₹5,000 fee for reactivation

A deactivated DIN restricts a director from signing ROC filings.

5. Non-Filing of Director Changes (Form DIR-12):

Appointments, resignations, or designation changes of directors must be filed within 30 days using Form DIR-12.

Penalty:

Additional filing fees
Monetary penalties on the company and officers

Failure to update director information is a frequent oversight.

6. Non-Filing of Registered Office Details (Form INC-22):

Companies must inform the ROC of their registered office address and any changes.

Common Issues:

Delayed filings
Incorrect address information

Penalty:

Monetary fines on the company and officers

This often occurs during business relocation or early-stage setup.

7. Failure to File Share Allotment (Form PAS-3):

All share allotments must be reported within 30 days using Form PAS-3.

Penalty:

Late filing fees
Monetary penalties
Complications during investor due diligence

Startups raising funds frequently encounter this issue.

8. Non-Maintenance of Statutory Registers:

Companies must maintain registers such as:

Consequences:

Monetary penalties
Increased risk during inspections

Improper documentation is a common compliance weakness.

9. Failure to File Charges (Forms CHG-1 & CHG-4):

Creation or satisfaction of charges related to secured borrowings must be reported within statutory timelines.

Risks:

Additional filing fees
Legal complications with lenders
ROC penalties

This is particularly important for companies with loans or secured financing.

10. Submission of Incorrect or False Information:

Providing inaccurate or misleading information to the ROC is treated as a serious offence.

Consequences:

Significant monetary penalties
Prosecution under company law
Director disqualification

This is among the most severe ROC violations and carries long-term implications.

Impact of ROC Penalties on Businesses:

ROC penalties extend beyond financial costs. They can result in:

Reduced investor confidence
Fundraising and M&A challenges
Heightened regulatory scrutiny
Reputational harm
Risk of director disqualification

Repeated defaults may significantly hinder business growth.

Director Disqualification for Non-Compliance:

If a company fails to file financial statements or annual returns for three consecutive financial years, directors may be disqualified under Section 164 of the Companies Act, 2013.

Consequences include:

Inability to act as director
Leadership disruption
Reputational damage
Legal complications

This underscores the importance of consistent compliance.

How to Avoid Common ROC Penalties in India?

Preventive compliance is far easier than corrective action. Companies should:

Maintain a detailed compliance calendar
Engage qualified company secretaries or compliance professionals
Conduct periodic internal compliance reviews
File statutory forms well before deadlines
Maintain accurate and updated records

A structured compliance system significantly reduces risk.

Compounding of ROC Offences:

Certain defaults can be resolved through compounding, allowing companies to regularize non-compliance by paying prescribed amounts.

Benefits:

Avoids prolonged litigation
Faster resolution
Reduced legal exposure

However, not all offences are eligible for compounding, making timely compliance essential.

The Role of Professional Support:

Engaging experienced professionals—such as company secretaries, chartered accountants, or legal advisors—helps businesses:

Interpret regulatory requirements correctly
Monitor statutory changes
Avoid filing errors
Strengthen governance systems

Professional oversight is particularly beneficial for startups and growing enterprises.

Final Thoughts:

Understanding common ROC penalties in India is critical for companies operating under the Companies Act, 2013. Most penalties arise from avoidable procedural lapses rather than deliberate wrongdoing.

By prioritizing compliance, maintaining proper documentation, and seeking professional guidance, companies can protect their directors, preserve credibility, and build a sustainable foundation for growth.

Disclaimer:

The views expressed in this article are personal and intended solely for awareness and educational purposes. This content does not constitute legal advice or product recommendations.