CA INTER COMPANY LAW

PENALTY CHART
Incorporation of Company & Matter Incidental thereto

(*)SECTION 10A – COMMENCEMENT OF BUSINESS

Particulars Person Liable Punishment

Non-compliance of Company Penalty 50,000
provisions of this Every officer in Penalty one thousand rupees for
section default each day during which
such default continues
but not exceeding an
amount of one lakh
rupees
No declaration has Registrar has initiate action for the
been filed with the reasonable cause to removal of the name of
Registrar within a believe that the the company from the
period of one hundred company is not register of companies
and eighty days of the carrying on any
date of incorporation business or
operations

ONE PERSON COMPANY

Particulars Person Liable Punishment

Contravention of OPC or any officer Fine Only Upto 5000 and further
Provisions of Rules of OPC fine of 500 per day during
which contravention
continues.

SECTION 8 COMPANY

Particulars Person Liable Punishment

Non-compliance of Company Fine Only Minimum: 10 lakhs
provisions of Section 8 Maximum: 1 crore
Directors and With Fine Fine:
every officer in Minimum: 25000
default Maximum: 25 lakhs

when it is proved that every officer in liable for action under section 447
the affairs of the default
company were
conducted fraudulently

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Penalty Chart 2
(*)RULE 9 – RESERVATION OF NAME

Particulars Person Liable Punishment

Where after Company has not Penalty The reserved name shall
reservation of name, it been incorporated be cancelled and the
is found that name was person who has made the
applied furnishing application shall be liable
wrong or incorrect to a penalty which may
information extend to one lakh rupees
Company has Penalty After giving opportunity
been incorporated of being heard:
• Either direct the
company to
change its name
within a period of
3 months, after
passing an
ordinary
resolution;
• Take action for
striking off the
name of the
company from the
register of
companies; or
• Make a petition
for winding up of
the company.

SECTION 12 – PUBLICATION OF NAME & REGISTERED OFFICE

Particulars Person Liable Punishment

Default in Section 12 Company Fine Only One thousand rupees for
Every officer in Fine Only every day during which
default default continues not
exceeding one lakh
rupees

SECTION 15 – ALTERATION TO BE NOTED IN EVERY COPY

Particulars Person Liable Punishment

Default in Section 15 Company Penalty One thousand rupees for
Every officer in Penalty every copy of the
default Memorandum or Articles
issued without containing
any Alteration

SECTION 16 – RECTIFICATION OF NAME OF COMPANY

Particulars Person Liable Punishment

Default in Section 17 Company Fine Only • CG Allot a New

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Penalty Chart 3
Name of Company
• Registrar shall
enter new name
in the register of
companies
• Registrar shall
issue a fresh
certificate of
Incorporation

SECTION 17 – COPIES OF MOA, AOA TO BE GIVEN TO MEMBERS

Particulars Person Liable Punishment

Default under sub- Company Fine Only One thousand rupees for
section (1) Every officer in Fine Only each day during which
default such default continues or
one lakh rupees,
whichever is less.

Prospectus

(*)SEC 40(5) – SECURITIES TO BE DEALT WITH IN STOCK EXCHANGES

Particulars Person Liable Punishment

Non-compliance of Company Fine Minimum: 5 lakh
provisions of this Maximum: 50 lakhs
section Every officer in Fine Only Minimum: 50000
default Maximum: 3 lakhs

SEC 39(5) – ALLOTMENT OF SECURITIES

Persons Liable Punishment

✓ Company Penalty for each default of 1000/day for each day during which
✓ every officer in such default continues
default Maximum: 1 lakh

FILING OF RETURN OF ALLOTMENT

Particulars Person Liable Punishment

For Non- Filing Company Penalty Rs. 1000 each day during
Promoters & Penalty which such default
Directors continues but not
exceeding Rs. 25 lakhs.

(*)SECTION 42 – PRIVATE PLACEMENT

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Penalty Chart 4
If a company makes an offer or accepts monies in contravention then-
Persons Liable Penalty

✓ Company May extend to the amount involved in offer or 2 Crore

✓ Promoters whichever is lower.
✓ Directors Company shall also refund all monies to subscribers within a
period of 30 days of the order imposing penalty.

Share Capital & Debentures

SECTION 46 – CERTIFICATE OF SHARES

Particulars Person Liable Punishment

Issues a duplicate Company Fine Only Minimum: five times the face
certificate of shares value of the shares involved in
with intent to the issue of the duplicate
defraud certificate

Maximum: ten times the face

value of such shares or rupees
ten crores whichever is higher
every officer of the liable for action under section
company who is in 447.
default

(*)SECTION 53 - PROHIBITION OF ISSUE AT DISCOUNT

Particulars Person Liable Punishment

Effect of default Company and Every Punishable Maximum:
Officer in default with Penalty ✓ Amount equal to the
amount raised through
the issue of shares at a
discount or
✓ five lakh rupees,
✓ whichever is less.

SECTION 56 – TRANSFER OF SECURITIES

Particulars Person Liable Punishment

Default is made in Company Penalty Fifty thousand rupees
complying with the Every officer in Penalty
provisions of sub- default
sections (1) to (5),

SECTION 57 – PUNISHMENT FOR PE RNONATION OF S HAREHOLDER

Particulars Person Liable Punishment

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Penalty Chart 5
If a person Person Fine & Imprisonment Imprisonment:
deceitfully Min-1 Year
personates as Max- 3 years
owner
Fine:
Min-1 Lakh
Max- 5 Lakh rupees

(*)SECTION 58 – REFUSAL OF REGISTRATION AND A PPEAL

Particulars Person Liable Punishment

Contravention of Person Fine & Imprisonment Imprisonment:
Order of Min-1 Year
Tribunal Max- 3 years

Fine:
Min-1 Lakh
Max- 5 Lakh rupees

SECTION 64 - NOTICE OF ALTERATION OF SHARE CAPITAL

Particulars Person Liable Punishment

Default in Section 64 Company Penalty Five hundred rupees for
each day during which
such default
continues, subject to a
maximum of five lakh
rupees.
Every officer in Penalty Five hundred rupees for
default each day during which
such default
continues, subject to a
maximum one lakh
rupees.

SECTION 66- REDUCTION OF SHARE CAPITAL -

Liability of defaulting officers
Particulars Person Liable Punishment

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Penalty Chart 6
✓ knowingly conceals the name Officer of the Company Liable for fraud u/s 447
of any creditor entitled to
object to the reduction;
✓ knowingly misrepresents the
nature or amount of the debt
or claim of any creditor; or
✓ abets or is privy to any such
concealment or
misrepresentation as
aforesaid

(*)SECTION 67 – PROHIBITION ON FINANCIAL ASSISTANCE FOR BUY -

BACK

Particulars Person Liable Punishment

Default in Company Fine Only Minimum: 1 lakh
complying with the Maximum: 25 lakhs
provisions of this every officer of the Fine and/or Minimum: 1 lakh
section company who is in Imprisonment Maximum: 25 lakhs
default
Imprisonment upto 3 years

SECTION 68 – “BUY-BACK” ITS OWN SECURITIES

Particulars Person Liable Punishment

Default in Company Fine Only Minimum: 1 lakh
complying with the Maximum: 3 lakhs
provisions of this every officer of the Fine Only Minimum: 1 lakh
section or any company who is in Maximum: 3 lakhs
regulations made by default
SEBI

Deposits

SECTION 74 - REPAYMENT OF DEPOSITS ACCEPTED BEFORE

COMMENCEMENT OF THE COMPANIES ACT, 2013

Particulars Person Liable Punishment

A company fails to Company Fine Only Minimum: 1 crore
repay the deposit or
part thereof or any Maximum: 10 crores
interest thereon every officer of the Fine and/or Minimum: 25 lakhs
within the original company who is in Imprisonment Maximum: 2 crores
or extended time default
Imprisonment: Upto 7 years

SECTION 76 A - PUNISHMENT FOR CONTRAVENTION

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Penalty Chart 7
Particulars Person Liable Punishment
A company accepts or Company Fine Only Minimum: Lower of:
invites or allows any 1 crore or twice the amount of
deposit in contravention deposits
of the manner or the
conditions prescribed Maximum: 10 crores
under section Every officer in Fine and/or Minimum: 25 lakhs
73 or section 76 or rules default Imprisonment Maximum: 2 crores
or fails to repay the
deposit or interest within Imprisonment: Upto 7 years.
time.

Charges

(*)SECTION 86 - PENALTY

Default If any Company contravenes any provisions relating to Registration of

Charges
Punishment Company and Penalty of 500000
Every Officer of the Company who is Penalty of 50000
in default shall be punishable with –
If any person wilfully furnishes any false or incorrect information or
knowingly suppresses any material information, required to be registered
in accordance with the provisions of section 77, he shall be liable for action
under section 447

Management & Administration

(*)FAILURE TO MAINTAIN THE REGISTERS

Default Punishment for whom? Fine/Imprisonment

Failure to maintain register Company Penalty- 3 Lakhs
or in accordance with Every Officer in default Penalty- 50000
provisions

SECTION 89 & RULE 9 – COMPANIES (MANAGEMENT AND

ADMINISTRATION) RULES, 2014

FAILURE TO GIVE DECLARATION/ FILE RETURN

Default Punishment for whom? Fine/Imprisonment

If a company, required to file a return fails to do so before the expiry of the time
specified therein
Company one thousand rupees for each day
during which such failure continues

Maximum: 5 lakhs
Every Officer in default one thousand rupees for each day

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Penalty Chart 8
during which such failure continues

Maximum: 2 lakhs
If any person fails to make a declaration as required
Such Registered/Beneficial fifty thousand rupees and in case of
Owner continuing failure, with a further
penalty of two hundred rupees for
each day

Maximum: 5 lakhs

SECTION 90 - REGISTER OF SIGNIFICANT BENEFICIAL OWNERS IN A

COMPANY

Default Penalty Maximum Fine

Failure by any person to 50000 2 lakhs
make Declaration u/s 90 If failure continues, 1000
more per day
Failure to make Register/ file return/permit inspection
On Company 1 lakh 5 lakhs
If failure continues, 500 more
per day
On Officer in default 25000 1 lakh
If failure continues, 200 more
per day

SECTION 91 – POWER TO CLOSE REGISTERS

Particulars Person Liable Punishment

Register is kept closed Company Penalty Rs. 5000 subject to a
in contravention of maximum of Rs. 1 lakh.
section 91

(*)SECTION 92 – ANNUAL RETURN

Particulars Person Liable Punishment

If any company fails to Company & Penalty Ten thousand rupees and
file its annual return Officer in Default in case of continuing
before the expiry of the failure, with further
period specified. penalty of one hundred
rupees for each day
during which such failure
continues, subject to a
maximum of two lakh
rupees in case of a
company and fifty
thousand rupees in case
of an officer who is in
default.

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Penalty Chart 9
CS in Practice Penalty certifies the annual
return otherwise than
in conformity with the
requirements of this
section or the rules made
thereunder, he shall
be liable to a penalty of
two lakh rupees.

SECTION 94 – PLACE OF KEEPING REGISTERS & INSPECTION

Particulars Person Liable Punishment

Refusal of Inspection/ Company Penalty One thousand rupees for
Extract Taking Every officer in Penalty every day subject to a
default maximum of one lakh
rupees during which the
refusal or default
continues

(*)SECTION 99 – PUNISHMENT FOR DEFAULT

Particulars Person Liable Punishment

Non-Compliance of Company Fine Max Fine- 100000
directions issued by Every Officer in Fine Continuing Default-
Tribunal u/s 96-98 Default 5000/Day

SECTION 102 – EXPLANATORY STATEMENT

Particulars Person Liable Punishment

Default is made in Promoter/ Penalty Higher of-
complying with the Director/ 50000 or
provisions Manager or Other 5* Amount of Benefit
KMP or Relatives

SECTION 105 – PROXIES

Particulars Person Liable Punishment

Default is made in Every Officer in Penalty Rs. 5000
complying calling of default
meeting
Invitation to appoint a Person Inviting Penalty Rs. 50000
person as Proxy

SECTION 111 – CIRCULATION OF MEMBERS RESOLUTION

Particulars Person Liable Punishment

Default is made in Company Penalty Twenty-five thousand
complying with the Every officer in Penalty rupees.
provisions of this default
section

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Penalty Chart 10

SECTION 117 – RESOLUTION S TO BE FILED

Particulars Person Liable Punishment

If any company fails to Company Penalty Ten thousand rupees and
file the resolution or in case of continuing
the agreement before failure, with a further
the expiry of the period penalty of one hundred
specified therein rupees for each day after
the first during which
such failure continues,
subject to a maximum of
two lakh rupees
Every officer in Penalty Ten thousand rupees and
default & in case of continuing
Liquidator failure, with a further
penalty of one hundred
rupees for each day after
the first during which
such failure continues,
subject to a maximum of
fifty thousand rupees.

(*)SECTION 118 – MINUTES OF PROCEEDINGS OF MEETINGS

Particulars Person Liable Punishment

default is made in Company Penalty Twenty-five thousand
complying with the rupees
provisions of Section Officer in Default Penalty Five thousand rupees

Particulars Person Liable Punishment

Tampering with the Any Person Fine & Imprisonment: Upto 2
minutes of the Imprisonment Year
proceedings of meeting Fine: not less than
twenty-five thousand
rupees but which may
extend to one lakh
rupees.

SECTION 121 – REPORT ON ANNUAL GENERAL MEETING

Particulars Person Liable Punishment

Failure to report as Company Penalty Only Minimum: 1 lakh
required Continuing Failure: 500 per day
Maximum: 5 lakh
Every officer in Penalty Only Minimum: 25000
default Continuing Failure: 500 per day
Maximum: 1 lakh

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Penalty Chart 11
SECTION 119 – INSPECTION OF MINUTES BOOK OF MEETING BY
MEMBERS

Particulars Person Liable Punishment

Refusal to permit Company Penalty Twenty-five thousand
inspection of Minutes rupees for each
or non-furnishing of refusal/default.
copies within the time Officer in Default Penalty Five thousand rupees for
specified each refusal/default.

Declaration & Payment of Dividend

(*)SECTION 124 – UNPAID DIVIDEND ACCOUNT

Punishment for If a company fails to comply with requirements of this section,

Contravention Company Fine Minimum- 1 lakh
[Section 124(7)] Maximum- 10 Lakhs
Continuing default- 500/day
Officer in Fine Minimum- 25000
default Maximum- 2 Lakhs
Continuing default- 100/day

(*)SECTION 127 – FAILURE TO DISTRIBUTE DIVIDENDS

Where a dividend has been declared by a company but has not been paid within thirty days
from the date of declaration to any shareholder entitled to the payment of the dividend,
Who shall be every director of the company shall, if he is knowingly a party to the
liable? default
Imprisonment & be punishable with
Fine Imprisonment- Max- 2 Years and with
Fine- Minimum- 1000/day during which such default continues and
The company shall be liable to pay simple interest at the rate of 18% p.a. during the period
for which such default continues.

Accounts of Companies

(*)SECTION 128 – PRESERVATION AND INSPECTION OF BOOKS OF

ACCOUNTS

For Who shall be ✓ Managing director,

Contravention liable? ✓ The whole-time director in charge of finance,
of Sec. 128 ✓ The Chief Financial Officer or
✓ Any other person of a company charged by the Board
with the duty of complying with the provisions of this section,
contravenes such provisions
Fine Minimum- 50000
Maximum- 5 Lakhs

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Penalty Chart 12

(*)SECTION 129 – FINANCIAL STATEMENT

For Who shall be ✓ Managing director,

Contravention liable? ✓ The whole-time director in charge of finance,
of Sec. 129 ✓ The Chief Financial Officer or
✓ Any other person of a company charged by the Board
with the duty of complying with the provisions of this
section, contravenes such provisions
Fine/ Minimum- 50000
Imprisonment/ Maximum- 5 Lakhs
Both
Imprisonment- Upto 1 Year

SECTION 132 – NATIONAL FINANCIAL REPORTING AUTHORITY

Particulars Person Punishment

Liable
Powers of NFRA - Individual Penalty Not less than one lakh rupees, but which may
where extend to five times of the fees received
professional or Firms Penalty & Penalty: Not less than five lakh rupees, but
other misconduct Debarring which may extend to ten times of the fees
is proved received

Debarring: the member or the firm from—

• being appointed as an auditor or
internal auditor or undertaking any
audit in respect of financial statements
or internal audit of the functions and
activities of any company or body
corporate; or
• performing any valuation as provided
under section 247,
for a minimum period of six months or such
higher period not exceeding ten years as may
be determined by the National Financial
Reporting Authority.

SECTION 134 – CONTENT OF BOARD’S REPORT

Particulars Person Liable Punishment

Contravention Company Fine: 3 Lakhs
of any Every officer of the company who is Fine: 50000
provision of in default
this section

SECTION 135 – CORPORATE SOCIAL RESPONSIBILITY

Failure to spent the amount of CSR or transfer it to scheduled Bank

[Sec 135(7)] [Contravention of Sec 135(5)/ 135(6)]
Penalty on Company Lower of (1 crore) OR (2*Amount to be transferred).

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Penalty Chart 13
Penalty on Officer in default: Lower of (2 lakh) OR (1/10th of Amount to be
transferred)

SECTION 136 - RIGHT OF MEMBERS TO GET AUDITED FINANCIAL

STATEMENT

Particulars Person Liable Punishment

Penalty for Non Company Fine Maximum-25000
Compliance Officer in Default Fine Maximum- 5000

SECTION 137 - FILING OF DOCUMENTS WITH REGISTRAR

Particulars Person Liable Punishment

Contravention Company Penalty Minimum- 10000
of Section 137 Maximum-2 Lakh
Continuing failure- 100/day
✓ MD and CFO if any; OR Penalty Minimum- 10000
✓ Director charged by Board Maximum- 50000
with such responsibility; OR Continuing failure- 100/day
✓ All Directors

Audit & Auditors

SECTION 140 - REMOVAL OF AUDITOR BEFORE EXPIRY OF HIS TERM

Particulars Person Punishment

Liable
If the auditor does Auditor Penalty Fifty thousand rupees or an amount equal to
not comply with the remuneration of the auditor, whichever is
above provisions less, and in case of continuing failure, with
further penalty of five hundred rupees for each
day after the first during which such failure
continues, subject to a maximum of two lakh
rupees

(*)SECTION 143(12) - REPORTING OF FRAUD BY AUDITOR

If any auditor, cost accountant, or company secretary in practice does not comply with the
provisions of sub-section (12), he shall,—
(a) in case of a listed company, be liable to a penalty of five lakh rupees; and
(b) in case of any other company, be liable to a penalty of one lakh rupees.

(*)SECTION 147 - PUNISHMENT FOR CONTRAVENTION

Contravention of Who shall be liable? Penalty

Sections
Contravention of Company: Fine Minimum- 25000
provisions of Maximum- 5 Lakh

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Penalty Chart 14
sections 139 to 146 Officer in Default: Fine
Minimum- 10000
Maximum- 1 Lakh
Contravention of Auditor: Fine Minimum- 25000
Provisions of Maximum- Lower of
Section 139, 144 ✓ 5 lakh
and 145 ✓ 4 times of Auditor’s remuneration
Wilful / Intention to Imprisonment: Max- 1 year
deceive the company or
its shareholders or Fine
creditors or tax Minimum- 50000
authorities: Maximum- Lower of
Imprisonment and Fine ✓ 25 lakh
✓ 8 times of Auditor’s remuneration
If Auditor Convicted: Where an auditor has been convicted, he
Refund shall be liable to refund the remuneration
received by him to the company and pay for
damages to the company, statutory bodies
or authorities or to members or creditors of
the company for loss arising out of incorrect
or misleading statements of particulars
made in his audit report.

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