PQR Ltd. failed to appoint a whole time CS as required under Section 203 of Companies Act 2013. Advice the company on the grounds to be indicated in show cause notice/adjudicating orders.

The grounds that may be indicated in the show cause notice/adjudicating orders are discussed below: As per section 203(1) of the Companies Act, 2013 (the Act), every company belonging to such class or classes of companies as may be prescribed shall have whole-time key managerial personnel and as per Rule 8A of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, w.e.f. 09.06.2014, every company other than a company covered under rule 8 which has a paid up share capital of ₹5 crore or more shall have a whole-time company secretary and this threshold was further increased to ₹10 crore or more applicable in respect of financial years commencing on or after 01.04.2020. As per section 203(4) of the Act, if the office of any whole time key managerial personnel is vacated, resulting vacancy shall be filled up by the Board at a meeting of the Board within a period of six months from the date of such vacancy. The Company and its Directors are officers in default, as per section 2(60), of the Companies Act, 2013. And are thus liable for penal provisions. As per section 203(5) of the Act, if any company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.