Company master data showing less authorized capital.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 March 2016 What can be the consequences if master data of a company on the MCA website is showing less authorized capital? For example, say a company X, As per it financial statements Authorized Capital is 11 crore only but when i check it's master data on mca website, it is showing an Authorzed capital of 10 crore only.

Purnima Parashar

Purnima Parashar (Expert)
Follow

21 March 2016 you can log the Concern under MCA Service-Complaints-Create Service Related Complaint for correction of master data.
It can create prescrutiny problem when you file any form related with allotment of share, increase in authorised capital, Annual return etc.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

21 March 2016 Actually I want to know that what can be the set of reasons for this? Is their any liability of fine or penalty? because as per the financial statements of the company paid up capital of the company is 10.5 Crore.

Upgrade to CAclubindia Pro. Subscribe Now!

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
Follow

19 July 2024 If the master data on the MCA (Ministry of Corporate Affairs) website shows a different authorized capital compared to the financial statements of the company, it could indicate several potential issues or reasons:

1. **Filing Error**: It's possible that there was an error or omission during the filing of annual returns or incorporation documents with the MCA. This could result in discrepancies between the authorized capital mentioned in the company's documents (like the Memorandum of Association) and what is reflected on the MCA portal.

2. **Amendment**: The company might have filed for an amendment to its authorized capital at some point, which reflects the updated figure on the MCA website. However, if this amendment was not properly recorded or if there was a delay in updating the information, it could lead to discrepancies.

3. **Penalty or Fine**: The Companies Act, 2013 requires accurate and timely filing of documents with the MCA. If there are discrepancies found during audits or inspections by the Registrar of Companies (RoC), the company may be liable for penalties or fines. These penalties can vary based on the nature and severity of the non-compliance.

4. **Legal Implications**: Inaccurate or inconsistent information on the MCA website can lead to legal implications, especially during audits or if the company is involved in legal proceedings. It's crucial for companies to ensure that all filings with the MCA are accurate and up-to-date.

To address this issue:

- **Verification**: First, verify the authorized capital as per the company's Memorandum of Association and Articles of Association, which are legal documents that outline the company's capital structure.

- **Rectification**: If there is a discrepancy, the company should take steps to rectify it promptly. This may involve filing corrections or amendments with the MCA to align the master data with the actual authorized capital mentioned in the legal documents.

- **Consultation**: It's advisable to consult with a company secretary or legal advisor who can help navigate the process of correcting filings with the MCA and ensure compliance with regulatory requirements.

In summary, discrepancies in authorized capital between the company's internal records and what is reflected on the MCA website should be addressed promptly to avoid potential penalties or legal issues. Accuracy and compliance with regulatory filings are crucial for maintaining transparency and credibility in corporate governance.