Prosecution of Directors - MCA Issues Master Circular
CONSOLIDATING the earlier Circulars on prosecution of Directors, the Ministry of Corporate Affairs has issued a Master Circular.
It has come to the notice of the Department that in spite of various rulings available on the question of “officers in default” who can be held liable for violations of a particular provision under the Companies Act, the ROCs are arraying all the directors of the company for the violations without differentiating between officer in default and or others.
Ministry directs that “There should be proper application of mind on the part of Registrar of Companies in deciding whether a person to be implicated is an ‘officer in default' by examining the Annual Return, Form 32(s) and DIN-3 database available in the Registry. The guidelines issued should be applied and wrongful prosecution should be avoided”.
MCA Master Circular No. , Dated: July 29 2011