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CS Professional · Compliance Management, Audit and Due Diligence · Compliance Framework

Meghdoot Textiles Ltd is a public company. Its compliance officer says, 'Compliance means only filing forms with the Registrar on time.' Which statement best corrects this view of corporate compliance?

Corporate compliance means conforming to all applicable laws, rules, regulations, standards and the company's own internal policies. It is not restricted to filing forms with the Registrar, to one ministry's laws, or to listed companies, and paying a penalty does not cure a default.

  1. ACompliance covers conforming to laws, rules, regulations, standards and internal policies, not merely filing formsCorrect
  2. BCompliance is limited to statutes administered by the Ministry of Corporate Affairs
  3. CCompliance applies only to listed companies and not to unlisted public companies
  4. DCompliance is satisfied once the company pays the prescribed penalty for any default

Explanation

Corporate compliance is the wider discipline of adhering to external laws and regulations as well as internal policies, codes and standards. Limiting it to ROC filings or to one ministry is too narrow. Paying a penalty does not amount to compliance, because the underlying default remains a non-compliance.

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