Authorised capital

Y Singh N Rajput (Querist) 18 April 2021 This query is : Resolved
A Ltd Company is falsely reporting its authorized capital to be ten times than actual. What action can be taken against the Company - its directors ? What sections of law are applicable and where the case should be filed? What is remedy?

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A limited company has allegedly misrepresented its authorised capital, showing a figure ten times higher than its actual amount in its financial statements and company master data. This misrepresentation has occurred without proper formalities with the Registrar of Companies (ROC). The discussion explores potential legal actions against the company and its directors, referencing sections like 447 and 448 of the Companies Act 2013 concerning fraud. It suggests reporting the matter to the Serious Fraud Investigation Office (SFIO) as a potential remedy, noting that such actions can impact the public.

Sankaranarayanan (Expert) 18 April 2021
u/s 542 read with section 406

Y Singh N Rajput (Querist) 18 April 2021
s 406 is for Nidhi companies - how will it effect?

Asgher Mahdi (Expert) 18 April 2021
Where does the company has shown this false report?

Advocate Bhartesh goyal (Expert) 18 April 2021
Have you any proof regarding falsely reporting of companies capital and how it effects on your reputation. Don't blame on any one regarding his goodwill without any cogent evidence else have to face it's consequences.

Sankaranarayanan (Expert) 18 April 2021
you mentioned only company not about the Nidhi Company in your query. if it is Nidhi company then go through the section 10 A (2)

ashok kumar singh (Expert) 19 April 2021
agreed with views of earlier experts, therefore no comment so far.
thanks

Pradipta Nath (Expert) 19 April 2021
If you being aggrieved by a fraud committed by the company, you can report the complaint with Service Fraud Investigation Office through the Central Government. Fraud in relation to affairs of a company or any corporate body as defined in S.447 read with S.448 of the Companies Act 2013.

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kavksatyanarayana (Expert) 19 April 2021
Yes. This is under Sec. 447 & 448. But how are you saying that Limited Company making false statements? Actually, this is not your problem and you put an academic query.

Y Singh N Rajput (Querist) 20 April 2021
Putting the query other way -

A Ltd Co. in its Company Master is showing 1.0 year 2011, authorized capital as 50 lakhs. 2.0 year 2021, authorised capital as 5 crore. In fact in BS of year 2012 & later the figure is deliberately is reported as 5 crore - no formality is done with the ROC to raise this capital. The balance sheets as on date carry the same figure of 5 crore. What steps to be taken in this case? How the responsibility be fixed - The directors, auditors, company? Whom to approach and how?

Y Singh N Rajput (Querist) 20 April 2021
I hope it is now good enough to get an appropriate answer.

P. Venu (Expert) 20 April 2021
Certainly, you can bring the matters to the notice of the SFIO. Such frauds by company affects the public at large.

Asgher Mahdi (Expert) 20 April 2021
We appreciate your query whereas if your intent to test the knowledge of forum lawyers choose other platforms else club inviting to chat by offering at least a cup of coffee.I believe most of your query were best answered by our learned forum lawyers to their knowledge even if you require further clarification why cant you approach a corporate office by payments of fee as I believe you are financially sound by knowing to your query? Since, this platform is to help and assists those financially week and needy people.

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