Imprisonment of Company

Sec 292A(11) - Audit Committee- If a default is made in complying with the provisions of this section, the company, and every officer who is in default, shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to fifty thousand rupees, or with both.

Sec 372A - Inter corporate loans- If default is made in complying with the provisions of this section, other than sub-section (5), the company and every officer of the company who is in
default shall be punishable with imprisonment which may extend to two years or with fine which may extend to fifty thousand rupees ......

The above two section provides for imprisonment of company if the respective sections have not been complied with.

Respected members may explain the meaning of "imprisonment of company..." as laid down in the section. Is there any other section which has similar penal provision.

Thanks

Replies (1)

Hi Gokul,

A Company is an artificial person but has legal entity in the eyes of law. The Company camnnot be imprisoned but every officer in default is liable for imprisonment and the Company shall attract a fine.

Where as, every officer shall attract either fine or imprisonment or both.

Do not get confused that if Company pays the fine then the officers are not liable. Both are made liable for the same as the Company works because of the Directors.

 

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