In today’s corporate world for maintaining a Brand it is very important to have a Good Corporate Governance and for good governance it is very essential to comply with all the provisions of Corporate Laws. Non compliance will attract penalties or/ and penalties with imprisonment. The Companies Act, 2013 and even Companies Amendment Act, 2017 has come up with stringent penal provisions. But in this era where changes are happening very frequently is it possible to comply all the provisions..??
In practical scenario it is seen that sometimes default committed by Company was either due to omission or was technical in nature but as we know “Ignorance of Law, No excuse” which means that one cannot defend their action by claiming that they didn’t knew the Law. An offence is a clear violation of law and it attracts penal provisions. Offence can be classified as Civil or Criminal and further be classified as Compoundable and Non-Compoundable.
Now the question arise can we make the default good without going into litigation…?? The answer is yes. Compounding is the Solution of the same. In legal terms Compounding means “doing the default good”. It is basically a settlement of offence committed by a Company or any other officer. It was basically introduced for speedy recovery of cases and to reduce the burden of punishment on the defaulter. It also saves time and cost by payment of money in lieu of the prosecution.
Following are the details of Compounding:
1. Pre-requisite for Compounding
2. Application of Compounding to be filed with Whom…???
3. limitation of Compounding
4. Procedure of making Compounding Application
I hope you will find the same useful.
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