Non-payment of Stamp Duty By Company on issue of Security



Quick Summary
When a closely held company fails to pay stamp duty on issued share certificates or other securities, the Maharashtra Stamp Act doesn't provide for impounding or adjudication. In such cases, the company must issue a fresh certificate or security with current date stamp duty and apply for compounding of the offence under Section 441 of the Companies Act, 2013, for non-compliance with Section 55(4).

This is the common problem that several time while issuing the Securities the closely held Companies has not made the payment of Stamp Duty on issued Share certificate or Other Securities so in that Particular case there is no provision Under the Maharashtra Stamp Act for Impounding or Adjudicating the payment of Stamp

Stamp Duty on Company Securities: Non-Payment Solutions

In the Aforesaid situation Company needs to issue fresh Share certificate or Security  to the Shareholders or the Securityholders and make the payment of Stamp Duty in current date and apply for the compounding of Offence under Section 441 of Companies Act, 2013  with respect noncompliance of Section 55 (4) of Companies Act, 2013

The Underline Section and the Penalty mention under the Section are as follows:

Section 55(4) of Companies Act, 2013:

Every company shall, unless prohibited by any provision of law or any order of Court, Tribunal or other authority, deliver the certificates of all securities allotted, transferred or transmitted -

  • within a period of two months from the date of incorporation, in the case of subscribers to the memorandum;
  • within a period of two months from the date of allotment, in the case of any allotment of any of its shares;
  • within a period of one month from the date of receipt by the company of the instrument of transfer or, as the case may be, of the intimation of transmission), in the case of a transfer or transmission of securities;
  • within a period of six months from the date of allotment in the case of any allotment of debenture:

Penalty for Noncompliance of aforesaid section:

Company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees.


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