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List of all penalties under Companies Act, 2013

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Vinita Verma

The law poses various obligations to be discharged by the Companies , Directors, Managers and other Officials. Non-compliance of such obligations attracts punishment which may be imprisonment and/ or fine/ penalty. The new Companies Act, 2013 has come up with more stringent punishment and penalties for the non- compliance of various provisions of and rules under the Act as compared to the former Companies Act, 1956. Therefore, Companies and other responsible person(s) must look the same for ascertaining the implications of the actions done/ to be done by themselves so that the requisite compliance should be in place within prescribed time. For knowledge and guidance following table will help to provide reference of such implications under Companies Act, 2013
Comprehensive list of Penalties under Companies Act, 2013:-

Comprehensive list of Penalties under Companies Act, 2013
Comprehensive list of Penalties under Companies Act, 2013
Penalty 
Persons to be held responsible for offences
Company
Officer in default
Section 15- Alteration of memorandum and articles to be noted in every copy
If alteration made in the memorandum or articles of a company is not noted in every copy of the memorandum or articles.
1 thousand rupees for every copy of the memorandum or articles issued
Yes
Yes
Section 4(5) – Reservation of Name
After reservation of name , if information given is not correct then:
1 lakh rupees;
Yes
No
if the company has not been incorporated, the reserved name shall be cancelled and the person making application under sub-section (4) shall be liable to a penalty which may extend to 1 lakh rupees;
Section 16- Rectification of name of company
If a Company makes any default in registration of name as in the opinion of Central Government the name for registration is identical to the name of company already registered.
Fine:
Yes
Yes
In Case of Company: 1 thousand rupees for every day during which the default continues.
In case of officer: 5 thousand rupees but which may extend to 1 lakh rupees.
Section 17- Copies of memorandum, articles, etc., to be given to members
If on request of member ,company has not provided them a copy of
1 thousand rupees for each day during which such default continues or 1 lakh rupees, Whichever is less.
Yes
Yes
 Memorandum
Articles
every agreement and every resolution
Section 26- Matters to be stated in prospectus
If a public company defaults in the provisions of issue of prospectus
In Case of Company: 50 thousand rupees but which may extend to 3 lakh rupees.
Every Company and every person who knowingly continues default.
In case of others: Every person who is knowingly a party to the issue of such prospectus shall be punishable with:
Imprisonment: 3 Years. or
Fine: Not be less than 50 thousand rupees but which may extend to 3 lakh rupees, or both.
Section 39 – Allotment of securities by company
If the company has not returned the application money received.
One thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.
Yes
Yes
If a company having a share capital has not filed return of allotment with Registrar.
Section 40- Securities to be dealt with in stock exchanges
If a company is making public offer and it fails to inform to the one or more stock exchange and also fails to follow the provisions there under.
In Case of Company:
Yes
Yes
Not be less than 5 lakh rupees but which may extend to 50 lakh rupees
AND
In case of Officer :
Imprisonment:
for a term which may extend to 1 year
OR
Fine:
not be less than 50 thousand rupees but which may extend to 3 lakh rupees, or both.
Section 42- Offer or invitation for subscription of securities on private placement
If the Company or director or promoter has not followed the provisions of Private Placement.
The amount involved in the offer or invitation or 2 crore rupees, whichever is higher.
Yes
Yes
Section 53 – Prohibition on issue of shares at discount
If Company issues Shares at discount
In Case of Company :
Yes
Yes
Fine :
not be less than 1 lakh rupees but which may extend to 5 lakh rupees.
In Case of Officer:
Imprisonment: for a term which may extend to 6 months or
Fine:
not be less than 1 lakh rupees but which may extend to 5 lakh rupees, or both.
Section 56 -Transfer and transmission of securities
If a Company make any default in the provisions of transfer of Shares.
In Case Of Company:
Yes
Yes
Fine: Shall not be less than 25 thousand rupees but which may extend to 5 lakh rupees
In Case of officer:
Fine : Shall not be less than 10 thousand rupees but which may extend to 1 lakh rupees.
Section 57-Punishment for personation of shareholder
If a person deceitfully personates as owner of any security or interest etc. in a Company.
Imprisonment:
No
Yes
Not be less than 1 year but which may extend to 3 years
AND
Fine:
Not be less than 1 lakh rupees but which may extend to 5 lakh Rupees.
Section 59-Rectification of register of members
If a Company fails to comply with the orders of tribunal regarding rectification of registers of members.
In Case of Company:
Yes
Yes
Fine: Not less than 1 lakh rupees but which may extend to 5 lakh rupees .
In Case of officer:
Imprisonment: extend to 1 year
OR
Fine which shall not be less than 1 lakh rupees but which may extend to 3 lakh rupees, or both
Section 60-Publication of authorised, subscribed and paid-up capital
If a company advertises it’s authorized capital on Companies letter heads, business heads
Yes
Yes
In Case of Company:
10 thousand rupees
and
In Case of officer:
5 thousand rupees.
Section 64-Notice to be given to Registrar for alteration of share capital
If a Company fails to send notice to Registrar after alteration of Share Capital.
1 thousand rupees for each day during which such default continues, or 5 lakh rupees, whichever is less.
Yes
Yes
Section 68-Power of company to purchase its own securities
If a Company violates the Provisions of buy back of Securities.
In Case of Company
Yes
Yes
Fine:
Not less than 1 lakh rupees but which may extend to 3 lakh rupees.
In Case of officer
Imprisonment: for a term which may extend to 3 years or
Fine: which shall not be less than 1 lakh rupees but which may extend to 3 lakh rupees, or both
Section 74-Repayment of deposits, etc., accepted before commencement of this Act
If Company fails to repay deposit or interest thereof, within the time specified.
In Case of Company
Yes
Yes
(In addition to the payment of the amount of deposit or part thereof and the interest due)
Fine: Not be less than 1 crore rupees but which may extend to 10 crore rupees.
In Case of Officer
Imprisonment: which may extend to 7 years
OR
Fine: which shall not be less than 25 lakh rupees but which may extend to 2 crore rupees, or with both.
Section 86-Punishment for contravention of provisions of Charges
If a Company contravenes the provisions of Charge.
In Case of Company
Yes
Yes
Fine:
not be less than 1 lakh rupees but which may extend to 10 lakh rupees
In Case of Officer
Imprisonment: which may extend to 6 months or
Fine: not be less than 25 thousand rupees but which may extend to 1 lakh rupees, or with both.
Section 88-Register of members, etc
If a Company fails to maintain register of members.
In Case of Company and Officer
Yes
Yes
Fine: not be less than 50 thousand rupees but which may extend to 3 lakh rupees
Where the failure is a continuing:
With a further fine this may extend to 1 thousand rupees for every day, after the first during which the failure continues which may extend to 5 lakh Rupees.
Section 91-Power to close register of members or debenture holders or other security holders
If the register of members is closed without giving any notice or any shorter notice.
5 thousand rupees for every day subject to a maximum of 1 lakh rupees.
Yes
Yes
Section 92-Annual Return
If a Company fails to file copy of Annual Return within prescribed time.
In Case of Company
Yes
Yes
Fine:
not be less than 50 thousand rupees but which may extend to 5 lakhs rupees
In Case of Officer
Imprisonment:
for a term which may extend to 6 months
OR
Fine:
Not be less than 50 thousand rupees but which may extend to 5 lakh rupees, or with both.
Section 94- Place of keeping and inspection of registers, returns, etc
If Company refuses to give copy of registers or to take extract thereof
1 thousand rupees for every day default continues.
Yes
Yes
Section 99-Punishment for default in complying with provisions of sections 96 to 98. (Not Notified)
If Company defaults in holding meeting in acc. with Section 96 and 97.
Fine: 1 lakh rupees
Yes
Yes
In the case of a continuing default : With a further fine this may extend to 5 thousand rupees for every day.
Section 102-Statement to be annexed to notice
If default is made in complying with the provision of explanatory statement to be attached with notice of General meeting.
Every promoter, director, manager or other key managerial personnel.
Fine: which may extend to 50 thousand rupees or five times the amount of benefit accruing to the promoter, director, manager or other key managerial personnel or any of his relatives, whichever is more.
Section 105-Proxies
If any officer fails to annex a statement along with notice with regard to proxy.
5 Thousand rupees. 
No
Yes
Section 111-Circulation of members’ resolution
If a Company and its officers violates the provisions in regard to circulation of members resolution.
25 thousand rupees. 
Yes
Yes
Section 117-Resolutions and agreements to be filed
If a company fails to file the resolution or the agreement in a time prescribed.
In Case of Company:
Yes
Yes
not be less than 5 lakh rupees but which may extend to 25 lakh rupees
In Case of every Officer including liquidator, if any,
Fine: Not be less than 1 lakh rupees but which may extend to 5 lakh rupees.
Section 118-Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot
If Company is not complying with the provisions of minutes of general meeting.
In Case of Company
Yes
Yes
25 thousand rupees
In Case of Officer :
5 thousand rupees.
Section 119-Inspection of minute-books of general meeting
If Company refuses for inspection or to take copy of minutes of general meeting.
In Case of Company
Yes
Yes
25 thousand rupees
In Case of Officer: 
5 thousand rupees.
Section 121-Report on annual general meeting
If the company fails to file the report on Annual General Meeting.
In Case of Company
Yes
Yes
Fine: not be less than 1 lakh rupees but which may extend to 5 lakh rupees
In Case of Officer:
Fine : not be less than 25 thousand rupees but which may extend to 1 lakh rupees.
Section 127- Punishment for failure to distribute dividends
Where a dividend has been declared by a company but has not been paid
Every director of the company shall, be punishable with imprisonment which may extend to 2 years and with fine which shall not be less than 1 thousand rupees for every day during which such default continues
Yes
Yes
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: hever is more.
Section 128- Books of account, etc., to be kept by company
If an officer of the company makes default in the provisions of maintaining accounts of the Company
In Case of both Company and Officer:
No
Yes
Imprisonment :1 year
OR
Fine : not be less than 50 thousand rupees but which may extend to 5 lakh rupees or both
Section 129- Contravention of provisions of financial statements
If a company contravenes the provisions of this section, the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person charged by the Board with the duty of complying with the requirements of this section and in the absence of any of the officers mentioned above , all the directors shall be punishable.
Imprisonment : 1 year
No
Yes
OR
Fine : not be less than 50 thousand rupees but which may extend to 5 lakh rupees
OR
both
Section 134- Financial Statement, Board’s report, etc
If Company violates the provisions of Board’s Report.
In Case of Company
Yes
Yes
Fine: not be less than 50 thousand rupees but which may extend to 25 lakh rupees
In Case of Officer:
Imprisonment: 3 years
OR
Fine: Not be less than 50 thousand rupees but which may extend to 5 lakh rupees,
OR
 both.
Section 136- Right of member to copies of audited financial statement
If Company fails to send copy of financial statements, including consolidated financial statements, if any, auditor’s report and every other document required to be attached to its members.
In Case of Company
Yes
Yes
Fine: 25 thousand rupees
In Case of officer :
5 thousand rupees.
Section 137- Copy of financial statement to be filed with Registrar
If a company fails to file the copy of the financial statements with the Registrar
In Case of Company
Yes
Yes
Fine: 1 thousand rupees for every day during which the failure continues but which shall not be more than 10 lakh rupees,
In Case of officers in default
In Case of the managing director and the Chief Financial Officer of the company, if any,
OR
In the absence of the managing director and the Chief Financial Officer, any other director.
OR
Who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company.
Imprisonment: for a term which may extend to 6 months
OR
Fine: Not be less than 1 lakh rupees but which may extend to 5 lakh rupees,
OR
both.
Section 157-Company to inform Director Identification Number to Registrar
If a company fails to furnish Director Identification Number
In Case of Company
Yes
Yes
Fine: shall not be less than 25 thousand rupees but which may extend to 1 lakh rupees
In Case of Officer :
Fine: not be less than 25 thousand rupees but which may extend to 1 lakh rupees.
Section 172- Punishment for contravention of provision of Chapter- XIII (Meeting of Board and its Powers)
If Company contravenes any of the provisions of appointment and qualification of Director for which no penalty is prescribed.
In case of Company and officer
Yes
Yes
Fine: 50 thousand rupees but which may extend to 5 lakh rupees.
Section 178 – Nomination and Remuneration Commitee and Stakeholders Remuneration Committee
If Company defaults in constitution of Audit Committee.
In case of Company
Yes
Yes
Fine:Not less than 1 lakh rupees but which may extend to 5 lakh rupees.
In case of Officer
Imprisonment for a term which may extend to 1 year
OR 
Fine : Not less than 25 thousand rupees but which may extend to 5 lakh Rupees
OR
both 
Section 173- Meetings of Board
If Company defaults in constitution of Audit Committee.
In case of Officer
No
Yes
Fine: 25 thousand Rupees
Section 182 – Prohibitions and Restrictions regarding Political Contributions
If Company contributes more than the ceiling limit defined for political purpose.
In case of Company
Yes
Yes
Fine:Not less than 1 lakh rupees but which may extend to 5 lakh rupees.
In case of Officer
Imprisonment for a term which may extend to 1 year
OR 
Fine : Not less than 25 thousand rupees but which may extend to 1 lakh Rupees
OR
both.
Section 185 – Loan to Directors,etc
If Company while giving Loan to directors, contravenes provisions of section 185(1).
In case of Company
Yes
Yes
Fine:Not less than 5 lakh rupees but which may extend to 25 lakh rupees.
In case of the Director or other Person
(The director or the other person to whom any loan is advanced or guarantee or security is given or provided in connection with any loan taken by him or the other person)
Imprisonment: may extend to 6 months
OR 
Fine :Not less than 5 lakh rupees but which may extend to 25 lakh rupees or both
Section 186- Loan and Investment by Company
If Company contravenes the provisions of Inter Corporate loans and Investment.
In case of Company
Yes
Yes
Fine : Not less than 25 thousand rupees but which may extend to 5 lakh Rupees
In case of Officer
Imprisonment for a term which may extend to 2 years
AND 
Fine : Not less than 25 thousand rupees but which may extend to 1 lakh Rupees
Section 188 – Related Party Transactions
If Any director or any other employee of a company, who had entered into or authorised the contract or arrangement in violation of the provisions of Related party transaction.
In case of Listed Company
No
Yes
Imprisonment: 1 year
OR
Fine : Not less than 25 thousand rupees but which may extend to 5 lakh Rupees
OR 
both.
In case of Other Company
Fine : Not less than 25 thousand rupees but which may extend to 5 lakh Rupees
Section 189 -Register of contracts or arrangements in which directors are interested
If Section 8 Company fails to maintain Registers of contracts or arrangements in which directors are interested as defined under Section 184.
Every Director who is in default shall be liable to a penalty of 25 thousand Rupees
No
Yes
Section 190 – Contract of employment with managing or whole time diectors
If a Company (Except Private Company) has not kept its copy of contract with WTD or Manager at its Registered office and not provided copies of contract for inspection to its members.
In case of Company:
Yes
Yes
Fine: 25 thousand rupees
In case of Officer:
Fine: 5 thousand Rupees
Section 203- Appointment of Key Managerial Personnel
If Company does not follow the provisions of Key Managerial Personnel.
In case of Company–
Yes
Yes
Shall not be less than 1 lakh rupees but which may extend to 5 lakh rupees.
In case of every director and key managerial personnel:
Fine :
This may extend to 50 thousand rupees and
where the contravention is a continuing:
Further fine this may extend to 1 thousand rupees for every day after the first during which the contravention continues.
Section 204-Secretarial audit for bigger companies
 If a Company fails to attach secretarial audit Report to Board’s Report in a prescribed form.
In Case of Officer and Company:
Yes
Yes
Fine: 1 lakh rupees but which may extend to 5 lakh rupees.
Section 206 – Power to call for information , inspect books and conduct inquiries
If a company fails to furnish any information or explanation or produce any document to Registrar.
In Case of Officer and Company:
Yes
Yes
Fine: 1 lakh rupees and in the case of a continuing failure, with an additional fine which may extend to 5 hundred rupees for every day after the first during which the failure continues.
Section 207 – Conduct of inspection and inquiry
If any officer disobeys the direction issued by the Registrar or the inspector.
Imprisonment- 1Year
No
Yes
Fine: 25 thousand rupees but which may extend to 1 lakh rupees.
Section 405 – Power of Central Government to direct companies to furnish information or statistics
If any Company fails to provide to Central Government, all material information with regard to all its working and statistics etc
In Case of Company 
Yes
Yes
Fine: 25 thousand rupees.
In case of officer
Imprisonment: 6 Months
OR
Fine- 25 thousand Rupees which may extend to 3 lakh rupees
OR
Both
Section 449 – Punishment for false evidence
If any person intentionally gives any false evidence under any matter of this Act.
 Imprisonment- 3-7 Years
Any Person making default under the prescribed Section.
Fine: 10 lakh Rupees
Section 450 – Punishment where no specific penalty or punishment is provided
If a Company or any officer contravenes any of the provisions of this Act , subject to which any approval, direction or exemption in relation to any matter has been accorded and or which no penalty or punishment is provided elsewhere
In Case of Company and Officer 
Yes
Yes
Fine: 10 lakh Rupees
Where the default Continues:fine may extend to 1 thousand rupees for every day till default continues.
Section 451 – Punishment in case of repeated default
If a Company or any officer commits an offence punishable either with fine or with imprisonment and where the same offence is committed for the second within a period of three years.
In Case of Company and Officer Twice the amount of fine for such offence in addition to any imprisonment provided for that offence.
Yes
Yes
Section 452- Punishment for wrongful withholding of property
If any officer or employee of a company wrongfully withhold any property of the Company.
1 lakh rupees but which may extend to 5 lakh rupees.
No
Yes
Section 453 -Punishment for improper use of “Limited” or “Private Limited”
If any Person makes an improper use of the word limited or Private limited before incorporation of the Company.
5 hundred rupees but may extend to 2 thousand rupees for every day
Any Person making this default.
Section 454 -Adjudication of Penalties
If a company or any officer does not pay the penalty imposed by the adjudicating officer or the Regional Director
In case of Company 
Any Person making this default.
Fine:
25 thousand rupees but which may extend to 5 lakh rupees.
In case of Officer 
Fine: 25 thousand rupees but which may extend to 1 lakh rupees.
OR
Imprisonment: 6 months or Both
Section 464 – Prohibition of association or partnership of persons exceeding certain number
If any member of an association or partnership or is carried with the persons exceeding its prescribed limit.
Fine: 1 lakh rupees and shall also be personally liable for all liabilities incurred in such business.
Every member of an association or partnership.

(Author is a CS Management Trainee with Select Infrastructure Private Limited)

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Name: Vinita Verma
Qualification: CS
Company: Vinita & Associates
Location: New Delhi, New Delhi, IN
Member Since: 09 Aug 2018 | Total Posts: 8
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19 Comments

  1. Sushil Mehta says:

    Thanks for the Article, very much knowledgeable, please advise about if Rights issue participated, but entitled shares not allotted, to date no valid reason from company / registrars please advise section applicable ……..Thanks

      Reply
  3. Mark says:

    Section 450. Punishment where no specific penalty or punishment is provided

    If a company or any officer of a company or any other person contravenes any of

    the provisions of this Act or the rules made thereunder, or any condition, limitation or

    restriction subject to which any approval, sanction, consent, confirmation, recognition,

    direction or exemption in relation to any matter has been accorded, given or granted, and for

    which no penalty or punishment is provided elsewhere in this Act, the company and every

    officer of the company who is in default or such other person shall be punishable with fine

    which may extend to ten thousand rupees, and where the contravention is continuing one,

    with a further fine which may extend to one thousand rupees for every day after the first

    during which the contravention continues.

    Please update Penalty is 10K not 10 lacs

      Reply

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