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All Penalties under Companies Act, 2013

Vinita Verma 
Updated on 24 June 2016

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The law poses various obligations to be discharged by the Companies , Directors, Managers and other Officials. Non-compliance of such obligations attracts punishment which may be imprisonment and/ or fine/ penalty. The new Companies Act, 2013 has come up with more stringent punishment and penalties for the non- compliance of various provisions of and rules under the Act as compared to the former Companies Act, 1956. Therefore, Companies and other responsible person(s) must look the same for ascertaining the implications of the actions done/ to be done by themselves so that the requisite compliance should be in place within prescribed time. For knowledge and guidance following table will help to provide reference of such implications under Companies Act, 2013

Comprehensive list of Penalties under Companies Act, 2013:-

Comprehensive list of Penalties under Companies Act, 2013

Comprehensive list of Penalties under Companies Act, 2013

Penalty 

Persons to be held responsible for offences

 

Company

Officer in default

 

Section 15- Alteration of memorandum and articles to be noted in every copy

If alteration made in the memorandum or articles of a company is not noted in every copy of the memorandum or articles.

1 thousand rupees for every copy of the memorandum or articles issued

Yes

Yes

 

Section 4(5) – Reservation of Name

After reservation of name , if information given is not correct then:

1 lakh rupees;

Yes

No

 

if the company has not been incorporated, the reserved name shall be cancelled and the person making application under sub-section (4) shall be liable to a penalty which may extend to 1 lakh rupees;

 

Section 16- Rectification of name of company

If a Company makes any default in registration of name as in the opinion of Central Government the name for registration is identical to the name of company already registered.

Fine:

Yes

Yes

 

In Case of Company: 1 thousand rupees for every day during which the default continues.

 

In case of officer: 5 thousand rupees but which may extend to 1 lakh rupees.

 

Section 17- Copies of memorandum, articles, etc., to be given to members

If on request of member ,company has not provided them a copy of

1 thousand rupees for each day during which such default continues or 1 lakh rupees, Whichever is less.

Yes

Yes

 

 Memorandum

 

Articles

 

every agreement and every resolution

 

Section 26- Matters to be stated in prospectus

If a public company defaults in the provisions of issue of prospectus

In Case of Company: 50 thousand rupees but which may extend to 3 lakh rupees.

Every Company and every person who knowingly continues default.

 

In case of others: Every person who is knowingly a party to the issue of such prospectus shall be punishable with:

 

Imprisonment: 3 Years. or

 

Fine: Not be less than 50 thousand rupees but which may extend to 3 lakh rupees, or both.

 

Section 39 – Allotment of securities by company

If the company has not returned the application money received.

One thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.

Yes

Yes

 

If a company having a share capital has not filed return of allotment with Registrar.

 

Section 40- Securities to be dealt with in stock exchanges

If a company is making public offer and it fails to inform to the one or more stock exchange and also fails to follow the provisions there under.

In Case of Company:

Yes

Yes

 

Not be less than 5 lakh rupees but which may extend to 50 lakh rupees

 

AND

 

In case of Officer :

 

Imprisonment:

 

for a term which may extend to 1 year

 

OR

 

Fine:

 

not be less than 50 thousand rupees but which may extend to 3 lakh rupees, or both.

 

Section 42- Offer or invitation for subscription of securities on private placement

If the Company or director or promoter has not followed the provisions of Private Placement.

The amount involved in the offer or invitation or 2 crore rupees, whichever is higher.

Yes

Yes

 

Section 53 – Prohibition on issue of shares at discount

If Company issues Shares at discount

In Case of Company :

Yes

Yes

 

Fine :

 

not be less than 1 lakh rupees but which may extend to 5 lakh rupees.

 
   

In Case of Officer:

 

Imprisonment: for a term which may extend to 6 months or

 
   

Fine:

 

not be less than 1 lakh rupees but which may extend to 5 lakh rupees, or both.

 

Section 56 -Transfer and transmission of securities

If a Company make any default in the provisions of transfer of Shares.

In Case Of Company:

Yes

Yes

 

Fine: Shall not be less than 25 thousand rupees but which may extend to 5 lakh rupees

 

In Case of officer:

 

Fine : Shall not be less than 10 thousand rupees but which may extend to 1 lakh rupees.

 

Section 57-Punishment for personation of shareholder

If a person deceitfully personates as owner of any security or interest etc. in a Company.

Imprisonment:

No

Yes

 

Not be less than 1 year but which may extend to 3 years

 

AND

 

Fine:

 

Not be less than 1 lakh rupees but which may extend to 5 lakh Rupees.

 

Section 59-Rectification of register of members

If a Company fails to comply with the orders of tribunal regarding rectification of registers of members.

In Case of Company:

Yes

Yes

 

Fine: Not less than 1 lakh rupees but which may extend to 5 lakh rupees .

 

In Case of officer:

 

Imprisonment: extend to 1 year

 

OR

 

Fine which shall not be less than 1 lakh rupees but which may extend to 3 lakh rupees, or both

 

Section 60-Publication of authorised, subscribed and paid-up capital

If a company advertises it’s authorized capital on Companies letter heads, business heads

 

Yes

Yes

 

In Case of Company:

 

10 thousand rupees

 

and

 

In Case of officer:

 

5 thousand rupees.

 

Section 64-Notice to be given to Registrar for alteration of share capital

If a Company fails to send notice to Registrar after alteration of Share Capital.

1 thousand rupees for each day during which such default continues, or 5 lakh rupees, whichever is less.

Yes

Yes

 
 
 

Section 68-Power of company to purchase its own securities

If a Company violates the Provisions of buy back of Securities.

In Case of Company

Yes

Yes

 

Fine:

 

Not less than 1 lakh rupees but which may extend to 3 lakh rupees.

 

In Case of officer

 

Imprisonment: for a term which may extend to 3 years or

 

Fine: which shall not be less than 1 lakh rupees but which may extend to 3 lakh rupees, or both

 
   

Section 74-Repayment of deposits, etc., accepted before commencement of this Act

If Company fails to repay deposit or interest thereof, within the time specified.

In Case of Company

Yes

Yes

 

(In addition to the payment of the amount of deposit or part thereof and the interest due)

 

Fine: Not be less than 1 crore rupees but which may extend to 10 crore rupees.

 

In Case of Officer

 

Imprisonment: which may extend to 7 years

 

OR

 

Fine: which shall not be less than 25 lakh rupees but which may extend to 2 crore rupees, or with both.

 

Section 86-Punishment for contravention of provisions of Charges

If a Company contravenes the provisions of Charge.

In Case of Company

Yes

Yes

 

Fine:

 

not be less than 1 lakh rupees but which may extend to 10 lakh rupees

 

In Case of Officer

 

Imprisonment: which may extend to 6 months or

 

Fine: not be less than 25 thousand rupees but which may extend to 1 lakh rupees, or with both.

 

Section 88-Register of members, etc

If a Company fails to maintain register of members.

In Case of Company and Officer

Yes

Yes

 

Fine: not be less than 50 thousand rupees but which may extend to 3 lakh rupees

 

Where the failure is a continuing:

 

With a further fine this may extend to 1 thousand rupees for every day, after the first during which the failure continues which may extend to 5 lakh Rupees.

 

Section 91-Power to close register of members or debenture holders or other security holders

If the register of members is closed without giving any notice or any shorter notice.

5 thousand rupees for every day subject to a maximum of 1 lakh rupees.

Yes

Yes

 

Section 92-Annual Return

If a Company fails to file copy of Annual Return within prescribed time.

In Case of Company

Yes

Yes

 

Fine:

 

not be less than 50 thousand rupees but which may extend to 5 lakhs rupees

 

In Case of Officer

 

Imprisonment:

 

for a term which may extend to 6 months

 

OR

 

Fine:

 

Not be less than 50 thousand rupees but which may extend to 5 lakh rupees, or with both.

 

Section 94- Place of keeping and inspection of registers, returns, etc

If Company refuses to give copy of registers or to take extract thereof

1 thousand rupees for every day default continues.

Yes

Yes

 

Section 99-Punishment for default in complying with provisions of sections 96 to 98. (Not Notified)

If Company defaults in holding meeting in acc. with Section 96 and 97.

Fine: 1 lakh rupees

Yes

Yes

 

In the case of a continuing default : With a further fine this may extend to 5 thousand rupees for every day.

 

Section 102-Statement to be annexed to notice

If default is made in complying with the provision of explanatory statement to be attached with notice of General meeting.

 

Every promoter, director, manager or other key managerial personnel.

 

Fine: which may extend to 50 thousand rupees or five times the amount of benefit accruing to the promoter, director, manager or other key managerial personnel or any of his relatives, whichever is more.

 

Section 105-Proxies

If any officer fails to annex a statement along with notice with regard to proxy.

5 Thousand rupees. 

No

Yes

 

Section 111-Circulation of members’ resolution

If a Company and its officers violates the provisions in regard to circulation of members resolution.

25 thousand rupees. 

Yes

Yes

 

Section 117-Resolutions and agreements to be filed

If a company fails to file the resolution or the agreement in a time prescribed.

In Case of Company:

Yes

Yes

 

not be less than 5 lakh rupees but which may extend to 25 lakh rupees

 

In Case of every Officer including liquidator, if any,

 

Fine: Not be less than 1 lakh rupees but which may extend to 5 lakh rupees.

 

Section 118-Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot

If Company is not complying with the provisions of minutes of general meeting.

In Case of Company

Yes

Yes

 

25 thousand rupees

 

In Case of Officer :

 

5 thousand rupees.

 

Section 119-Inspection of minute-books of general meeting

If Company refuses for inspection or to take copy of minutes of general meeting.

In Case of Company

Yes

Yes

 

25 thousand rupees

 

In Case of Officer: 

 

5 thousand rupees.

 
   

Section 121-Report on annual general meeting

If the company fails to file the report on Annual General Meeting.

In Case of Company

Yes

Yes

 

Fine: not be less than 1 lakh rupees but which may extend to 5 lakh rupees

 

In Case of Officer:

 

Fine : not be less than 25 thousand rupees but which may extend to 1 lakh rupees.

 

Section 127- Punishment for failure to distribute dividends

Where a dividend has been declared by a company but has not been paid

Every director of the company shall, be punishable with imprisonment which may extend to 2 years and with fine which shall not be less than 1 thousand rupees for every day during which such default continues

Yes

Yes

 

AND

 

the company shall be liable to pay simple interest at the rate of 18% p.a. during the period for which such default continues: hever is more.

 

Section 128- Books of account, etc., to be kept by company

If an officer of the company makes default in the provisions of maintaining accounts of the Company

In Case of both Company and Officer:

No

Yes

 

Imprisonment :1 year

 

OR

 

Fine : not be less than 50 thousand rupees but which may extend to 5 lakh rupees or both

 

Section 129- Contravention of provisions of financial statements

If a company contravenes the provisions of this section, the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person charged by the Board with the duty of complying with the requirements of this section and in the absence of any of the officers mentioned above , all the directors shall be punishable.

Imprisonment : 1 year

No

Yes

 

OR

 

Fine : not be less than 50 thousand rupees but which may extend to 5 lakh rupees

 

OR

 

both

 

Section 134- Financial Statement, Board’s report, etc

If Company violates the provisions of Board’s Report.

In Case of Company

Yes

Yes

 

Fine: not be less than 50 thousand rupees but which may extend to 25 lakh rupees

 

In Case of Officer:

 

Imprisonment: 3 years

 

OR

 

Fine: Not be less than 50 thousand rupees but which may extend to 5 lakh rupees,

 

OR

 

 both.

 

Section 136- Right of member to copies of audited financial statement

If Company fails to send copy of financial statements, including consolidated financial statements, if any, auditor’s report and every other document required to be attached to its members.

In Case of Company

Yes

Yes

 

Fine: 25 thousand rupees

 

In Case of officer :

 

5 thousand rupees.

 

Section 137- Copy of financial statement to be filed with Registrar

If a company fails to file the copy of the financial statements with the Registrar

In Case of Company

Yes

Yes

 

Fine: 1 thousand rupees for every day during which the failure continues but which shall not be more than 10 lakh rupees,

 

In Case of officers in default

 

In Case of the managing director and the Chief Financial Officer of the company, if any,

 

OR

 

In the absence of the managing director and the Chief Financial Officer, any other director.

 

OR

 

Who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company.

 

Imprisonment: for a term which may extend to 6 months

 

OR

 

Fine: Not be less than 1 lakh rupees but which may extend to 5 lakh rupees,

 

OR

 

both.

 

Section 157-Company to inform Director Identification Number to Registrar

If a company fails to furnish Director Identification Number

In Case of Company

Yes

Yes

 

Fine: shall not be less than 25 thousand rupees but which may extend to 1 lakh rupees

 

In Case of Officer :

 

Fine: not be less than 25 thousand rupees but which may extend to 1 lakh rupees.

 

Section 172- Punishment for contravention of provision of Chapter- XIII (Meeting of Board and its Powers)

If Company contravenes any of the provisions of appointment and qualification of Director for which no penalty is prescribed.

In case of Company and officer

Yes

Yes

 

Fine: 50 thousand rupees but which may extend to 5 lakh rupees.

 
   
   

Section 178 – Nomination and Remuneration Commitee and Stakeholders Remuneration Committee

If Company defaults in constitution of Audit Committee.

In case of Company

Yes

Yes

 

Fine:Not less than 1 lakh rupees but which may extend to 5 lakh rupees.

 
   

In case of Officer

 
   

Imprisonment for a term which may extend to 1 year

 
   

OR 

 
   

Fine : Not less than 25 thousand rupees but which may extend to 5 lakh Rupees

 

OR

 

both 

 
   
   

Section 173- Meetings of Board

If Company defaults in constitution of Audit Committee.

In case of Officer

No

Yes

 

Fine: 25 thousand Rupees

 

Section 182 – Prohibitions and Restrictions regarding Political Contributions

If Company contributes more than the ceiling limit defined for political purpose.

In case of Company

Yes

Yes

 

Fine:Not less than 1 lakh rupees but which may extend to 5 lakh rupees.

 

In case of Officer

 
   

Imprisonment for a term which may extend to 1 year

 

OR 

 
   

Fine : Not less than 25 thousand rupees but which may extend to 1 lakh Rupees

 

OR

 

both.

 
   
   
   
   
   

Section 185 – Loan to Directors,etc

If Company while giving Loan to directors, contravenes provisions of section 185(1).

In case of Company

Yes

Yes

 

Fine:Not less than 5 lakh rupees but which may extend to 25 lakh rupees.

 

In case of the Director or other Person

 

(The director or the other person to whom any loan is advanced or guarantee or security is given or provided in connection with any loan taken by him or the other person)

 

Imprisonment: may extend to 6 months

 

OR 

 

Fine :Not less than 5 lakh rupees but which may extend to 25 lakh rupees or both

 
   

Section 186- Loan and Investment by Company

If Company contravenes the provisions of Inter Corporate loans and Investment.

In case of Company

Yes

Yes

 

Fine : Not less than 25 thousand rupees but which may extend to 5 lakh Rupees

 

In case of Officer

 
   

Imprisonment for a term which may extend to 2 years

 

AND 

 
   

Fine : Not less than 25 thousand rupees but which may extend to 1 lakh Rupees

 

Section 188 – Related Party Transactions

If Any director or any other employee of a company, who had entered into or authorised the contract or arrangement in violation of the provisions of Related party transaction.

In case of Listed Company

No

Yes

 

Imprisonment: 1 year

 

OR

 

Fine : Not less than 25 thousand rupees but which may extend to 5 lakh Rupees

 

OR 

 

both.

 

In case of Other Company

 
   

Fine : Not less than 25 thousand rupees but which may extend to 5 lakh Rupees

 

Section 189 -Register of contracts or arrangements in which directors are interested

If Section 8 Company fails to maintain Registers of contracts or arrangements in which directors are interested as defined under Section 184.

Every Director who is in default shall be liable to a penalty of 25 thousand Rupees

No

Yes

 
   

Section 190 – Contract of employment with managing or whole time diectors

If a Company (Except Private Company) has not kept its copy of contract with WTD or Manager at its Registered office and not provided copies of contract for inspection to its members.

In case of Company:

Yes

Yes

 

Fine: 25 thousand rupees

 

In case of Officer:

 

Fine: 5 thousand Rupees

 

Section 203- Appointment of Key Managerial Personnel

If Company does not follow the provisions of Key Managerial Personnel.

In case of Company–

Yes

Yes

 

Shall not be less than 1 lakh rupees but which may extend to 5 lakh rupees.

 

In case of every director and key managerial personnel:

 

Fine :

 

This may extend to 50 thousand rupees and

 

where the contravention is a continuing:

 

Further fine this may extend to 1 thousand rupees for every day after the first during which the contravention continues.

 

Section 204-Secretarial audit for bigger companies

 If a Company fails to attach secretarial audit Report to Board’s Report in a prescribed form.

In Case of Officer and Company:

Yes

Yes

 

Fine: 1 lakh rupees but which may extend to 5 lakh rupees.

 

Section 206 – Power to call for information , inspect books and conduct inquiries

If a company fails to furnish any information or explanation or produce any document to Registrar.

In Case of Officer and Company:

Yes

Yes

 

Fine: 1 lakh rupees and in the case of a continuing failure, with an additional fine which may extend to 5 hundred rupees for every day after the first during which the failure continues.

 

Section 207 – Conduct of inspection and inquiry

If any officer disobeys the direction issued by the Registrar or the inspector.

Imprisonment- 1Year

No

Yes

 

Fine: 25 thousand rupees but which may extend to 1 lakh rupees.

 

Section 405 – Power of Central Government to direct companies to furnish information or statistics

If any Company fails to provide to Central Government, all material information with regard to all its working and statistics etc

In Case of Company 

Yes

Yes

 

Fine: 25 thousand rupees.

 

In case of officer

 

Imprisonment: 6 Months

 

OR

 

Fine- 25 thousand Rupees which may extend to 3 lakh rupees

 

OR

 

Both

 
 
 
 

Section 449 – Punishment for false evidence

If any person intentionally gives any false evidence under any matter of this Act.

 Imprisonment- 3-7 Years

Any Person making default under the prescribed Section.

 

Fine: 10 lakh Rupees

 

Section 450 – Punishment where no specific penalty or punishment is provided

If a Company or any officer contravenes any of the provisions of this Act , subject to which any approval, direction or exemption in relation to any matter has been accorded and or which no penalty or punishment is provided elsewhere

In Case of Company and Officer 

Yes

Yes

 

Fine: 10000

 

Where the default Continues:fine may extend to 1 thousand rupees for every day till default continues.

 

Section 451 – Punishment in case of repeated default

If a Company or any officer commits an offence punishable either with fine or with imprisonment and where the same offence is committed for the second within a period of three years.

In Case of Company and OfficerTwice the amount of fine for such offence in addition to any imprisonment provided for that offence.

Yes

Yes

 

Section 452- Punishment for wrongful withholding of property

If any officer or employee of a company wrongfully withhold any property of the Company.

1 lakh rupees but which may extend to 5 lakh rupees.

No

Yes

 

Section 453 -Punishment for improper use of “Limited” or “Private Limited”

If any Person makes an improper use of the word limited or Private limited before incorporation of the Company.

5 hundred rupees but may extend to 2 thousand rupees for every day

Any Person making this default.

 

Section 454 -Adjudication of Penalties

If a company or any officer does not pay the penalty imposed by the adjudicating officer or the Regional Director

In case of Company 

Any Person making this default.

 

Fine:

 

25 thousand rupees but which may extend to 5 lakh rupees.

 

In case of Officer 

 

Fine: 25 thousand rupees but which may extend to 1 lakh rupees.

 

OR

 

Imprisonment: 6 months or Both

 

Section 464 – Prohibition of association or partnership of persons exceeding certain number

If any member of an association or partnership or is carried with the persons exceeding its prescribed limit.

Fine: 1 lakh rupees and shall also be personally liable for all liabilities incurred in such business.

Every member of an association or partnership.

 
 

Prepared By: VINITA VERMA [CS MANAGEMENT TRAINEE]


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