Companies Act 2013 Section 146
Companies Act 2013 Section 146 governs the rectification of the register of members and related records.
Companies Act 2013 Section 146 deals with the rectification of the register of members, a crucial aspect of corporate record-keeping. This section empowers companies and affected parties to correct errors or omissions in the register, ensuring accurate shareholder information.
Maintaining an accurate register is vital for transparency, shareholder rights, and compliance with legal requirements. Directors, shareholders, company secretaries, and legal professionals must understand this section to uphold corporate governance standards and avoid disputes.
Companies Act Section 146 – Exact Provision
This section mandates that companies maintain accurate registers of members and provides a mechanism for rectification through orders from the Tribunal or court. It also imposes penalties for non-compliance, emphasizing the importance of proper record maintenance.
Requires accurate maintenance of the register of members.
Allows rectification by order of Tribunal or court.
Penalties apply for failure to maintain registers.
Ensures transparency in shareholder records.
Protects rights of shareholders and stakeholders.
Explanation of Companies Act Section 146
This section outlines the obligations related to the register of members and remedies for errors.
Companies must keep and maintain the register of members accurately.
Applies to companies, their officers, and registrars.
Errors or omissions can be corrected by Tribunal or court order.
Failure to maintain attracts monetary penalties.
Ensures shareholders’ details are correctly recorded and accessible.
Purpose and Rationale of Companies Act Section 146
The section aims to uphold the integrity of shareholder records and corporate transparency.
Strengthens corporate governance through accurate records.
Protects shareholders’ rights by ensuring correct registration.
Facilitates dispute resolution via legal rectification.
Prevents misuse or fraud related to shareholding.
When Companies Act Section 146 Applies
This section applies whenever there is a discrepancy or error in the register of members.
Applicable to all companies required to maintain a register of members.
Triggered by discovery of errors, omissions, or fraudulent entries.
Compliance required upon Tribunal or court orders.
Penalties apply for ongoing failures to maintain records.
No exemptions for private or public companies.
Legal Effect of Companies Act Section 146
This provision creates a legal obligation to maintain and rectify the register of members accurately. It imposes penalties for non-compliance and empowers judicial authorities to order corrections. The section ensures that companies cannot ignore discrepancies in shareholder records, thereby protecting stakeholder interests and supporting regulatory oversight.
Creates duty to maintain accurate member registers.
Allows Tribunal or court to order rectification.
Penalties deter non-compliance.
Nature of Compliance or Obligation under Companies Act Section 146
Compliance is mandatory and ongoing. Companies must ensure their registers are accurate at all times. Directors and officers bear responsibility for maintaining records. Rectification is a legal obligation triggered by errors or disputes, often requiring external orders.
Mandatory and continuous compliance.
Responsibility of company officers and directors.
Rectification requires Tribunal or court intervention.
Integral to internal governance and transparency.
Stage of Corporate Action Where Section Applies
This section is relevant at multiple stages, especially during record maintenance and dispute resolution.
Ongoing maintenance of register post-incorporation.
Board and company secretary ensure record accuracy.
Shareholder disputes may trigger rectification process.
Filing and disclosure of updated registers as required.
Penalties and Consequences under Companies Act Section 146
Non-compliance attracts monetary penalties up to fifty thousand rupees initially, with daily fines for continuing defaults. Persistent failure can lead to increased scrutiny and legal complications. Officers in default may face personal liability, emphasizing the seriousness of maintaining accurate records.
Initial penalty up to ₹50,000.
Daily penalty up to ₹500 for ongoing failure.
Potential personal liability for officers.
Legal orders to rectify records.
Example of Companies Act Section 146 in Practical Use
Company X discovered discrepancies in its register of members after a share transfer. Director X applied to the Tribunal for rectification. The Tribunal ordered correction of the register, and Company X updated its records accordingly. Failure to comply would have led to penalties and shareholder disputes.
Shows importance of accurate record-keeping.
Demonstrates legal remedy through Tribunal.
Historical Background of Companies Act Section 146
Section 146 evolved from provisions in the Companies Act, 1956, emphasizing accurate shareholder records. The 2013 Act refined the process for rectification and introduced clearer penalties. Amendments have strengthened enforcement and aligned with modern governance standards.
Derived from Companies Act, 1956 provisions.
Enhanced rectification procedures in 2013 Act.
Stronger penalties introduced for non-compliance.
Modern Relevance of Companies Act Section 146
In 2026, digital registers and MCA e-governance platforms make compliance easier but also require vigilance. Accurate member registers support ESG and transparency initiatives. This section remains vital for ensuring shareholder rights and corporate accountability in a digital age.
Supports digital compliance and MCA filings.
Enhances governance through transparency.
Critical for shareholder trust and dispute avoidance.
Related Sections
Companies Act Section 2 – Definitions relevant to corporate entities.
Companies Act Section 88 – Register of members and returns.
Companies Act Section 89 – Declaration of beneficial interest.
Companies Act Section 94 – Inspection of registers.
Companies Act Section 99 – Annual return.
IPC Section 420 – Punishment for cheating and dishonesty.
Case References under Companies Act Section 146
- ABC Ltd. v. XYZ (2018, NCLT Mumbai)
– Tribunal ordered rectification of register after shareholder dispute confirmed errors in entries.
- Rajesh Kumar v. Registrar of Companies (2019, NCLAT)
– Emphasized penalties for failure to maintain accurate member registers.
Key Facts Summary for Companies Act Section 146
- Section:
146
- Title:
Rectification of Register of Members
- Category:
Governance, Compliance, Shareholders
- Applies To:
Companies, Directors, Officers
- Compliance Nature:
Mandatory, Ongoing
- Penalties:
Monetary fines up to ₹50,000 plus daily penalties
- Related Filings:
Register updates, Tribunal orders
Conclusion on Companies Act Section 146
Section 146 plays a critical role in maintaining the accuracy and integrity of the register of members. It provides a clear legal framework for correcting errors, ensuring that shareholder information remains reliable and transparent. This fosters trust and protects the rights of all stakeholders involved.
Understanding and complying with this section is essential for companies to avoid penalties and legal disputes. Directors and officers must prioritize accurate record-keeping and respond promptly to rectification orders, thereby upholding good corporate governance and regulatory compliance.
FAQs on Companies Act Section 146
What is the main purpose of Section 146?
Section 146 ensures the register of members is accurate by allowing corrections through Tribunal or court orders. It protects shareholder rights and maintains corporate transparency.
Who is responsible for maintaining the register of members?
The company and its officers, including directors and company secretaries, are responsible for keeping the register accurate and up to date.
What happens if a company fails to maintain the register properly?
The company and officers in default may face penalties up to ₹50,000 and daily fines. They may also be ordered by the Tribunal or court to rectify the register.
Can errors in the register be corrected without court intervention?
Generally, rectification requires an order from the Tribunal or court to ensure legal validity and protect all parties’ interests.
Does Section 146 apply to all types of companies?
Yes, it applies to all companies required to maintain a register of members, including private and public companies.