Compliance: It Is Not Just A Check Box!

1. Introduction

The Companies Act, 2013 ("Act") prescribes comprehensive compliance requirements for organizations. It categorizes violations as civil or criminal, subject to penalties or fines and/or imprisonment. Prior to 2018, most violations under the Act were criminal in nature, often resulting in onerous and severe penalties for even minor procedural lapses. Recognizing the need to create a more business-friendly environment, significant amendments were introduced in 2019 and 2020 to decriminalize several corporate offences. As a result, the Act now contains 124 penal provisions, out of which 58 non-compliances (previously 18) are classified as civil offences. The government has authorized the Registrar of Companies ("ROC") to adjudicate such civil offences and impose penalties. There are 25 ROCs in India who oversee violations and enforce compliance within their jurisdictions. According to the Ministry of Corporate Affairs' website, ROCs collectively