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ibha singh

ibha singh (Querist)
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23 January 2010 what are the consequences for non-compliance of section 58 A for public limited company

Ankur Garg

Ankur Garg (Expert)
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28 January 2010 Consequences in case of default in repayment of deposit or interest by a company

On committing default by a company on repayment of deposit or interest thereon, there shall be the following consequences:â€”

(i) shall not invite deposits unless it is not in default in the repayment of any deposit or payment of interest thereon. [Section 58A]

(ii) shall not make any loan or give guarantee or make any investment in shares till the default is made good. [Section 372(4)]

(iii) in sub-section (6), the fine for contravention of the provision has been increased to Rs. 10 lakhs but not less than Rs. 50,000. For failure to comply with the order of the Company Law Board/Tribunal the fine has been increased to Rs. 500 for every day of non-compliance. [Section 58A(10)]

(iv) in case of a public company commits default in repayment of deposit or interest thereon for a period of one year, the directors of such companies shall not be appointed as a director in any other company for a period of five years from that date. [Section 274(1)(g)]

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