A Company is an artificial person which is owned and managed by group of persons. It is owned by those who contribute the capital i.e. the shareholders whereas managed by those who are elected by the owners i.e. the directors. In such a case, the working directors or the key managerial personnel are responsible for all the activities of the Company including the compliances. In case there are no working directors, all the directors of the Company are held liable for all non-compliances under the Companies Act, 2013. In the later scenario the concept of declaring “Officer in default” thus becomes effective.
Section 2(60) of the Companies Act, 2013 defines “Officer who is in default” and it mentions officers such as whole-time director, KMP, directors, etc. who shall be liable to any penalty or punishment in case of default committed by the company (under the Companies Act, 2013). However, there is a mechanism to entrust a specific officer to comply with any provisions of the Act and thereafter, such person shall be the “officer who is in default” in exclusion of all other persons named in Section 2(60). He may be termed as Charged person in accordance with Section 2 sub section 60 clause IV of the Act, the charged person needs to give his/their consent to act as in this behalf to the Board for the same to be reported to the jurisdictional Registrar of Companies in Form GNL-3. The consent of the charged person taken needs to be filed through this form. The withdrawal of the consent for the charged person is also filed through the same form.
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