TMI BlogPOWER OF REGIONAL DIRECTOR TO COMPOUND OFFENCES UNDER COMPANIES ACT, 2013X X X X Extracts X X X X X X X X Extracts X X X X ..... POWER OF REGIONAL DIRECTOR TO COMPOUND OFFENCES UNDER COMPANIES ACT, 2013 - By: - Mr. M. GOVINDARAJAN - Corporate Laws / IBC / SEBI - Dated:- 26-11-2018 - - The Companies Act, 2013 provides for compounding of offences committed either by a company or any officer of the Company. The Regional Director is having power to compound the offence punishable under this Act with fine only and where the maximum amount of fine which may be imposed for such offence does not exceed ₹ 5,00,000. The following cases can be compounded by the Regional Director: Sl. No. Section Nature of offence Fine 1 11(2) Committing default in complying with the requirements relating to commencement of business. Fine upto ₹ 5,000 on company. Fine upto ₹ 1,000 for each day of default (for officer in default) 2 16(3) Committing default in complying with the directions issued under sub-section (1) relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to rectification of name of company Fine upto ₹ 1,000 for each day of default on company. Fine not less than ₹ 5,000 but may be extended to ₹ 1 lakh (for officer in default) 3 26(9) Contravention of provisions relating to issue of a prospectus Fine from ₹ 50,000 to 3 lakh on company. 4 53(3) Violation of provisions relating to issue of shares at discount Fine not less than ₹ 1 Lakh but may be extended to ₹ 5 lakh on company 5 56(6) Failure to comply with the provision relating transfer and transmission of securities under sub-section (1) to (5) Fine not less than ₹ 25,000 but may be extended to ₹ 5 lakh on company. Fine not less than ₹ 10,000 but may be extended to ₹ 1 lakh (for officer in default) 6 59 (5) Committing default in complying with the order of Tribunal relating to rectification of register of members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fine not less than ₹ 1 lakh but may be extended to ₹ 5 lakh on company 7 64(2) Failure to file a notice related to alteration, increase or redemption of share capital along with the altered memorandum with the Registrar Fine upto ₹ 1,000 for each day of default continues, or five lakh Rupees whichever is less 8 67(5) Contravening provisions relating to purchase by company or loans by company for purchase of its own shares Fine not less than ₹ 1 lakh but may be extended to ₹ 25 lakh on company. [If more than 5 lakh then compoundable by the Tribunal] 9 68(11) If a company makes any default in complying with the provisions of this section or any regulation made by the Securities and Exchange Board relating to buy back of securities Fine not less than ₹ 1 lakh but may be extended to ₹ 3 lakh on company 10 86 Contravention of any provision of Chapter VI rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Registration Of charges Fine not less than ₹ 1 lakh but may be extended to ₹ 10 lakh on company 11 88(5) Failure to maintain register of members or debenture-holders or other security holders as prescribed Fine not less than ₹ 50,000 but may be extended to ₹ 3 lakh and further fine up to ₹ 1000/- for each day of default in case failure continues 12 89(5) Failure to file declaration not holding beneficial interest in any share Fine upto ₹ 50,000 and further fine up to ₹ 1,000/- for each day in case failure continues 13 89 (7) Failure to file return relating to beneficial interest in any share before the expiry of the time specified under the first proviso to sub-section ( 1 ) of section 403 Fine not less than ₹ 500 but may be extended to ₹ 1,000 on company every officer who is in default and further fine up to ₹ 1000 for each day of default in case of failure continues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 92 (6) If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made there under. Fine which shall not be less than ₹ 50,000 but may be extended to ₹ 5 lakh 15 99 Default in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal Fine upto ₹ 1 lakh on company every officer who is in default and further fine up to ₹ 5,000/- for each day of default in case failure continues 16 102 (5) Default in complying with the provisions of this section relating to statement to be annexed to notice Fine upto ₹ 50,000 or 5 times the amount of benefit accruing to the promoter, director, manager or other key managerial personnel or any of his relatives, whichever is more 17 105(3) If default is made in complying with sub-section (2) relating to proxies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fine up to ₹ 5,000 on every officer who is in default 18 105(5) If invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued Every officer of the company who knowingly issue or willfully authorizes or permits their issue shall be punishable with fine up to ₹ 1 lakh 19 121(3) Failure to file report on annual general meeting Fine not less than ₹ 1 lakh but may be extended to ₹ 5 lakh on company. Fine not less than ₹ 25,000 but may be extended to ₹ 1 lakh (for officer in default) 20 124(7) Failure to transfer the amount of accumulated profits to unpaid dividend and violating other provisions of Section 124 Fine not be less than ₹ 1 lakh but may be extended to ₹ 5 lakh or with both (for every officer in default) 21 137(3) Failure to file financial statements with the Registrar Fine up to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 1,000/- for each day of default, but maximum up to ₹ 10 lakh 22 140(3) Non compliance by auditor of sub section (2) relating to filing of registration information Fine not less than ₹ 50,000 but may be extended to ₹ 5 lakhs on auditor/audit firm 23 147(1) Failure of company to comply with the provisions of sections 139 to 146 with regard to auditors Fine not less than ₹ 25,000 but may be extended to ₹ 5 lakh on company 24 157(2) Failure to furnish DIN to Registrar Fine not less than ₹ 25,000 but may be extended to ₹ 1 lakh on company and every officer in default 25 165 (6) Acting as a director of more than 20 companies Fine not less than ₹ 5,000 but may be extended to ₹ 25000 for each day of default 26 166(7) Default in complying with the provisions of this section relating to directors duties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fine not less than ₹ 1 lakh but may be extended to ₹ 5 lakh on directors 27 172 Contravention of the provisions of Chapter XI relating to appointment and qualifications of directors Fine not less than ₹ 50,000 but may be extended to ₹ 5 lakh 28 178(8) Default in complying with the provisions of Section 177 of this section relating to Committee like Nomination, Remuneration and Stakeholders Relationship Committee Fine not less than ₹ 1 lakh but may be extended to ₹ 5 lakhs on company 29 188 (5)(ii) Related party transaction in case of other country Fine not less than ₹ 25,000 but may be extended to ₹ 5 lakh 30 187 (4) Contravention of the provisions of this section relating to investment of company held in its name Fine not less than ₹ 25,000 but may be extended to ₹ 25 lakhs on company 31 191 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) Contravention of the provisions of this section relating to payment to director for loss of office in connection with transfer of property Fine not less than ₹ 25,000 but may be extended to ₹ 1 lakh on such director 32 197 (15) Contravention of the provisions of this section relating to managerial remuneration in case of absence or inadequacy of profits Fine not less than ₹ 1 lakh but may be extended to ₹ 5 lakhs. 33 203 (5) Contravention of the provisions of this section relating to appointment of Key Managerial personnel. Fine not less than ₹ 1 lakh but may be extended to ₹ 5 lakh on company. Fine up to ₹ 50,000 on Director or Key Managerial Person who is in default and further fine up to ₹ 1000 for each day of default in case of the contravention continues 34 204(4) Contravention of the provisions of this section relating to Secretarial Audit for bigger companies Fine not less than S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 1 lakh but may be extended to ₹ 5 lakh on the company, every officer of the company and company secretary in practice. 35 206(7) Failure to furnish any information during inspection or inquiry Fine up to ₹ 1 lakh and further fine up to ₹ 500 for each day of default on the company and every officer of the company 36 221(2) Any removal, transfer or disposal of funds, assets or properties of the company in contravention of the order of the Tribunal under sub-section (1) Fine not less than ₹ 1 lakh may be extended to ₹ 25 lakh on company. 37 222(2) Securities in any company are issued or transferred or acted upon in contravention of an order of the Tribunal under sub-section (1) Fine not less than ₹ 1 lakh but may be extended to ₹ 25 lakh on company 38 232 (8) Contravention of the provisions of the transfer and transferee company in case of merger or amalgamation Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne not less than ₹ 1 lakh but may be extended to ₹ 25 lakhs on company 39 238(3) Failure to register the offer of schemes involving transfer of shares Fine not less than ₹ 25,000 but may be extended to ₹ 5 lakhs on director who issue such circular 40 242(8) Contravention of the order of the Tribunal relating to alterations in memorandum of articles Fine not less than ₹ 1 lakh but may be extended to ₹ 25 lakh on company 41 247 (3) proviso Contravention of the provisions of this section by the valuer Fine not less than ₹ 25,000 but may be extended to ₹ 1 lakh 42 249(2) Filing of application in restricted cases for removal of name Fine up to ₹ 1 lakh 43 302 (4) Committing default by official liquidator in forwarding a copy of the order of dissolution of company by trial with the period specified in sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (3) Fine up to ₹ 5000 for each day of default (on company liquidator) 44 306(5) Default in calling the meeting of the creditors, to prepare a statement of the position of the company s affairs along with a list of creditors, estimated amount of claim and filing the resolution with Registrar. Fine not less than ₹ 50,000 but may be extended to ₹ 2 lakh 45 307(2) Default in publication of resolution to wind up voluntarily Fine up to ₹ 5,000 for each day of default on company and every officer of the company 46 312(2) Failure to give notice of appointment of Company Liquidator to Registrar Fine up to ₹ 500 for each day of default on company and every officer who is in default 47 314 (5) Failure to prepare quarterly statement of accounts by company liquidator in voluntary winding up and file with Registrar under sub-section (5) Fine up to ₹ 5000 for each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of default (on company liquidator) 48 318(8) Failure to complying with the provisions of this section relating to final meeting and dissolution of company Fine up to ₹ 1 lakh (on company liquidator) 49 342(6) Failure to neglect to give assistance required under sub-section (5) Fine not less than ₹ 25,000 but may be extended to ₹ 1 lakh 50 344 (2) Failure to give statement that the company is in liquidation Fine not less than ₹ 50000 but may be extended to ₹ 3 lakhs 51 348(6) Contravention of the provisions of information as to pending liquidation Fine up to ₹ 5,000 for each day of default (for company liquidator) 52 356(2) Failure to file certified copy of the order of Tribunal relating to dissolution of company void with the Registrar. Fine up to ₹ 10,000 for each day of default (for company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liquidator or the person on whose application the order was passed) 53 392 Contravention of the provisions of Chapter XXII by a foreign company Fine not less than ₹ 1 lakh but may be extended to ₹ 3 lakh fine and further fine up to ₹ 50,000 for each day of default 54 405(4) Failure to furnish information or statistics etc., by the companies required by the Central Government Fine up to ₹ 25,000 on company 55 450 No specific penalty or punishment is provided in the Act Fine up to ₹ 10,000 and further fine up to ₹ 1,000 for each day of default in case of contravention continue 56 451 Repeated default within 3 years Twice the amount of fine for such offence in addition to any imprisonment provided for that offence 57 452(1) Punishment for wrongful withholding of property Fine not less than ₹ 1 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but may be extended to ₹ 5 lakh on officer or employee of the company 58 453 Improper use of words limited and private limited Fine not less than ₹ 500 but may be extended to ₹ 2000 for each day of default 59 454(8) Failure to pay the penalty imposed by the adjudicating officer or Regional Director Fine not less than ₹ 25,000 but may be extended to ₹ 5 lakh on company 60 464(3) Being a member of a company formed exceeding certain numbers Fine up to ₹ 2 lakh and liabilities incurred in such business 61 469(3) Contravention of the Rules framed by Central Government Fine up to ₹ 5,000 and further fine up to ₹ 500 for each day of default in case of contravention continues. 62 186 (13) Contravention of the provisions of this section relating to loans and investments Fine not less than ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 25,000 but may be extended to ₹ 5 lakhs on company - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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