Penalties after incorporation of the company - Part 2

Nature of Default

Defaulting party

Civil Liability

Criminal Liability (Imprisonment)

Sec 143 - Failure of the auditor to report fraud by employees against the company

Auditor, Cost Accountant or Company Secretary

In case of a listed company, INR 5 lakh and in case of any other company, INR 1 lakh

Sec 147 - Contravention of Sec 139 to 146 (aspects related to audit and auditors)

Company and Every officer in default Auditor Auditor

Min: INR 25 thousand and Max: INR 5 Lakhs for a company

Min: INR 10 thousand and Max: INR 1 Lakh for every officer in default

Sec 148 - Default in complying with the orders of the Central Government pertaining to cost audit

Company and Every officer in default and Cost Auditor

Min: INR 25 thousand and Max: INR 5 Lakhs for a company

Min: INR 10 thousand and Max: INR 1 Lakh for every officer in default

Min: INR 25 thousand and Max: INR 5 Lakhs for cost auditor

Sec 157 - Failure by the company to inform DIN to Registrar.

Company and Every officer in default

Min: INR 25 thousand Max: INR 1 Lakh for company and Min: INR 25 thousand Max: INR 1 Lakh for every officer in default

Sec 159 - Contravention of: Sec 152- appointment of directors, Sec 155-Prohibition to obtain more than one DIN and Sec 156-Director to intimate DIN

Individual/Director

INR 50 thousand or Further, a fine of INR 500 for every day of default

Sec 165 - Contravention of maximum no. of directorships

The person accepting appointment as director

INR 2 thousand for every day during which the contravention continues Max: INR 2 lakh

Sec 166 - Contravention of duties of directors.

Director

Min: INR 1 Lakh Max: INR 5 Lakhs

Sec 167 - Functioning as director after attaining disqualification.

Director

Min: INR 1 Lakh Max: INR 5 Lakhs

Sec 172 - No specific punishment under chapter XI

Company & every officer in default

Min: INR 50 thousand Max: INR 5 Lakhs

Sec 178 - Contravention of provisions of Sec 177 related to Audit committee and nomination and remuneration committee and stakeholders relationship  committee

Company and Every officer in default

Min: INR 50 thousand and Max: INR 3 Lakhs for company and Max: INR 1 Lakhs for every officer in default

Sec 182- Political contribution made in excess of the limits

Company and Every officer in default

5 times the amount contributed

Max: 6 months

Sec 184 - Failure to disclose interest held by directors in any company/contract/arrangement

Director

INR 1 Lakh OR

Sec 185 - Loan to directors/any other person in whom the director is interested/give a guarantee in connection with the loan taken by the director or such other person in contravention of the provisions of this section

Company Director/any other person to whom any loan is advanced or guarantee or security is given

Min: INR 5 Lakh Max: INR 25 Lakh

Max: 6 months

Sec 186-Contravention of provisions pertaining to loan and investment by the company.

Company and Every officer in default

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

Max: 2 years

Sec 187- Contravention by the company regarding investments of the company to be held in its own name.

Company and Every officer in default

INR 5 lakhs for a company and INR50 thousand for every officer in default

Sec 188 Contract entered into/ authorised in contravention with the provisions outlined under the section-Related party transactions.

Director/any other employee who had entered into or authorized the contract or arrangement in violation of this section

In case of a listed company, INR 25 Lakhs and in case of any other company INR 5 Lakhs

Sec 189 - Failure to disclose the interest of the director in any contract/arrangement in Register

Director

INR 25 thousand

Sec 190 - Failure to maintain a copy of the contract of employment with managing director or whole-time director/written memorandum in absence of a written contract & also failure to keep it open for inspection without fee

Company and Every officer in default

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

Sec 197 - Breach of the limit of the overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits.

Any person

Min: INR 1 Lakh Max: INR 5 Lakhs

Sec 203 - Default in complying with provisions relating to appointment of KMP

Company Every director & KMP

Min: INR 1 Lakh Max: INR 5 Lakhs INR 50 thousand In the case of Continuing one INR 1 thousand per day

Sec 204 - Failure to comply with provisions related to secretarial audit, annexing of secretarial audit report and failure by the Board to provide an explanation to the qualifications stated.

Company/ every officer/company secretary in default

Min: INR 1 Lakh Max: INR 5 Lakhs