SECTION 170, 171 & 172 OF COMPANIES ACT, 2013

SECTION 170: REGISTER OF DIRECTORS AND KEY MANAGERIAL PERSON AND THEIR SHAREHOLDING

A company is required to maintain a register of directors and key managerial personnel and their shareholding under Section 170 of the Act. These provisions are as under:

Every company shall keep at its registered office a register containing the prescribed particulars of its directors and key managerial personnel. The prescribed particulars shall include details of securities held by each of them in the company or its holding, subsidiary, subsidiary of its holding companies or associate companies. In this respect Rule 17 of the Companies (Appointment and
Qualifications of Directors) Rules, 2014, is relevant. It prescribes the following particulars to be included in the Register:

Director Identification Number (optional for key managerial personnel);
present name and surname in full;
any former name or surname in full;
father's name, mother's name and spouse’s name(if married) and surnames in full;
date of birth;
residential address (present as well as permanent);
nationality (including the nationality of origin, if different);
occupation;
date of the board resolution in which the appointment was made;
date of appointment and reappointment in the company;
date of cessation of office and reasons therefor;
office of director or key managerial personnel held or relinquished in any other body corporate;
membership number of the Institute of Company Secretaries of India in case of Company Secretary, if applicable; and
Permanent Account Number (mandatory for key managerial personnel if not having DIN);

In addition to the above details, the company shall also include in the Register the details of securities held by them in the company, its holding company, subsidiaries, subsidiaries of the company’s holding company and associate companies relating to:

(a) the number, description and nominal value of securities;

(b) the date of acquisition and the price or other consideration paid;

(c) date of disposal and price and other consideration received;

(d) cumulative balance and number of securities held after each transaction;

(e) mode of acquisition of securities ;

(f) mode of holding - physical or in dematerialized form; and

(g) whether securities have been pledged or any encumbrance has been created on the securities.

Filing of Return in Form DIR-12 with the Registrar: Section 170(2) read with Rule 18 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 requires a company to file a return in Form DIR-12 in respect of its directors and the key managerial personnel after paying the prescribed fee as under:

(a) within 30 days from the appointment; and
(b) within 30 days of any change taking place

EXEMPTION

Section 170 of the Companies Act, 2013 shall not apply to a Government Company in which the entire capital is held by the Central Government or by any State Government or Governments or by the Central Government or by one or State Government subject to the condition that Government Company has not committed a default in filing its financial statement under Section 137 or Annual return under Section 92 with the registrar [Notification No. G.S.R 463(E), dated 5th June, 2015 as amended by Notification No. G.S.R 582(E), dated 13-06-2017].

SECTION 171: MEMBER’S RIGHT TO INSPECT

The members of the company have a right to inspect the register of directors and key managerial personnel under Section 171 of the Act. Accordingly:

Timing for inspection: The register of directors and key managerial personnel shall be kept open for inspection during business hours. The members shall have the right to take extracts therefrom and copies thereof on request and the same will be provided to them within 30 days free of cost.
Open for inspection: The register shall also be kept open for inspection at every annual general meeting of the company and shall be made accessible to any person attending the meeting.
Registrar to order in case of refusal: If any inspection during business hours is refused, or if any copy required as above is not sent within thirty days from the date of receipt of such request, the registrar shall on an application made to him order immediate inspection and supply of copies.

EXEMPTION

SECTION 172: PUNISHMENT

Section 172 of the Act provides that if a company contravenes any of the provisions of Chater XI containg Sections 149 to 171 and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.

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