Penalties after incorporation of the company - Part 1

Nature of Default

Defaulting party

Civil Liability

Criminal Liability (Imprisonment)

Sec 88 - Failure to maintain a register of members/debenture-holders/security holders

Company and Every officer in default

INR 3 Lakhs for the company and INR 50 thousand for each officer in default

Sec 89 - Failure to make a declaration in respect of a beneficial interest in any share. Failure to file return pertaining to the declaration with the registrar.

Company and Every officer in default.

Max: INR 5 lakh for the company Max: INR 2 lakh for every officer in default Max: INR 1 thousand for every day of default.

Sec 91- Closure of register of members or debenture holders or other security holders without notice/shorter notice/ in excess of limits prescribed.

Company and Every officer in default.

INR 5 thousand for every day of default Max: INR 1 Lakh

Sec 92 - Failure to file annual return.

Company Every officer in default.

Min: INR 10 thousand Max: INR 2 Lakhs for a company Max: INR 50 thousand for every officer in default Max: INR 100 for every day of default.

Sec 94 - Refusal of Inspection or making a copy/extract.

Company and Every officer in default.

INR 1 thousand for every day of default Max: INR 1 Lakhs

Sec 99- Default in complying with Sec 96 - AGM Sec 97 - Power of the tribunal to call AGM and Sec 98 - Power of a tribunal to call meetings of members OR Orders of Tribunal.

Company and every officer in default

Max: INR 1 Lakh Further INR 5 thousand for every day of default

Sec 102 - Failure to comply with provisions related to statement to be annexed to notice calling a meeting

Every promoter/director/manager/KMP in default

INR 50 thousand or 5 times the benefit accruing to the persons mentioned in column (2) or any of the relatives, Whichever is higher

Sec 105 - Failure to mention members eligibility to appoint a proxy. Wilfully/knowingly issues the invitation to appoint a proxy.

Every officer in default

Max: INR 5 thousand

Sec 111 - Failure to circulate members’ resolution

Company and every officer in default

INR 25 thousand

Sec 117- Failure to file the resolution and agreement.

Company and Every officer in default (including liquidator)

Min: INR 10 thousand and Max: INR 2 Lakhs for company Min: INR 10 thousand and Max: INR 50 thousand for every officer in default

Sec 118 - Failure to maintain the minutes of proceedings of the general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot. Guilty of tampering with the minutes of the proceedings of the meeting.

Company and Every officer in default

Failure to maintain the minutes - INR 25 thousand for the company INR 5 thousand for every officer in default

Max: 2 years

Guilty of tampering -

Min: INR 25 thous Max: INR 1 lakh

Sec 119 - Refusal to inspect or copies not furnished within the specified time.

Company and Every officer in default

INR 25 thousand for the company INR 5 thousand for every officer in default

Sec 121 - Failure to file the report on AGM before the expiry of a specific period.

Company and Every officer in default

For a company a Min: INR 1 lakh and Max: INR 5 Lakhs and for every officer in default Min: INR 25 thousand Max: INR 1 Lakh

Sec 124 - Default in complying with provisions related to Unpaid Dividend Account

Company and Every officer in default

For a company a Min: INR 1 and Max: INR 10 Lakhs and for every officer in default Min: INR 25 thousand Max: INR 2 Lakhs

Sec 127- Punishment for failure to distribute dividends.

Every director in default Company

INR 1 thousand for every day of default & Simple Interest @ 18% p.a during the period for default continues

Max: 2 years

Sec 128 - Failure to comply with the provision relating to maintenance of books of accounts etc by the company.

Managing director , Whole-time director in charge of finance, Chief Financial Officer or such other person

Min: INR 50 thousand Max: INR 5 Lakh

Sec 129 - Failure to comply with provisions relating to proper disclosure of financial statements

Managing director, Whole-time director in charge of finance, Chief Financial Officer or such other person in charge (as appointed by the board in the absence of any of the officers mentioned, all directors)

Min: INR 50 thousand Max: INR 5 Lakh

Max: 1 year

Sec 134 - Contravention of the provisions relating to Financial Statements, Boards Report Etc

Company and Every officer in default

INR 3 lakh for the company and INR 50 thousand for every officer in default

Sec 136 - Denial of the right of the member to inspect copies of the audited financial statements.

Company and Every officer in default

INR 25 thousand for the company and INR 5 thousand for every officer in default

Sec 137- Failure to file the copy of financial statements with the registrar.

Company and Managing Director and Chief Financial officer (In their absence any director charged by the board with the responsibility. In the absence of such director, all directors)

Min: INR 10 thousand and Max: INR 2 lakh for the company

Min: 10 thousand and Max: INR 50 thousand for officers mentioned in column (2)

Sec 140- Failure of the auditor to file the notice on resignation, with the company and registrar & also the C&AG in case of government companies. The right of representation abused/auditor has acted in a fraudulent manner

Auditor

Min: INR 50 thousand Max: INR 2 Lakhs