COMPANIES ACT, 2013
FINES, PENALTIES AND PROSECUTION
CA. Arun Saxena
Saxena & Saxena
Chartered Accountants
811, Ansal Bhawan
16, Kasturba Gandhi Marg,
New Delhi – 110 001.
Mob.: 9810037364
E-mail : arunsaxena@saxenaandsaxena.com
FINE AND PENALTY
2
Penalty
Fine
Non- Compliance
Breaking of Law
Imposed by Superior
Authority
Imposed by court
Conviction is important
SAXENA & SAXENA
PENALTIES
3

Some of the important penalties provided in the new
Companies Act, 2013:-
Section
8
11
Particulars
Minimum Penalty
Maximum Penalty
Non-Profit making
companies
i. Company –
Rs.10.00 lakh
Rs.1 Crore
ii. Director /Officer –
Rs.25,000/-
Rs.25.00 lakhs
Commencement of
Business
-
SAXENA & SAXENA
Company- Rs. 5000
Director /Officer –
Rs. 1000 everyday
4
Section Particulars
12
Registered Office
Minimum Penalty
Maximum Penalty
Company & Officer
in default– Rs. 1000
for everday
Rs.1 Lakh
15
Alteration of MOA Company & Officer
to be noted in
in default– Rs. 1000
every copy
for every copy
_
16
Rectification of
name of company
_
Company – Rs. 1000
everyday
Officer in default –
Rs. 5000
SAXENA & SAXENA
Rs. 1 Lakh
5
Section Particulars
Minimum Penalty
Maximum Penalty
17
Copy of MOA, AOA
to members
Company &
Officer in default – Rs. 1 Lakh
Rs. 1000 everyday (whichever is less)
26
Matters to be stated
in Prospectus
Company & any
other person
Rs. 50,000/-
39
Rs. 3 Lakhs
Allotment of Securities Company &
Officer in default – Rs. 1 Lakh
Rs. 1000 each day (whichever is less)
SAXENA & SAXENA
6
Section Particulars
40
Minimum Penalty
Securities to be dealt Company –
in Stock Exchange
Rs. 5 Lakhs
Maximum Penalty
Rs. 50 Lakhs
Officer in default–
Rs. 50000
Rs. 3 Lakhs
46
Default in issue of
Five times of face
duplicate certificate value
of shares with intend
to defraud
SAXENA & SAXENA
Ten times of face
value or Rs.10.00
crores whichever is
higher
7
Section Particulars
48
53
56
Minimum Penalty
Maximum Penalty
Company &
Officer in default
– Rs. 25000
Rs. 5 Lakhs
Prohibition on issue
Company &
of Shares at discount Officer in default
– Rs. 1 Lakh
Rs. 5 Lakhs
Transfer and
Transmission
Rs. 5 Lakhs
Variation of
Shareholders Rights
Company –
Rs. 25000
Officer in default–
Rs. 10,000
Rs. 1Lakhs
SAXENA & SAXENA
8
Section Particulars
59
Rectification of
register of members
Minimum Penalty
Maximum Penalty
Company –
Rs. 1 Lakh
Rs. 5 Lakhs
Officer in default–
Rs. 1 Lakh
Rs. 3 Lakhs
66
68
Reduction of share
capital
Company –
Rs. 5 Lakh
Rs. 25 Lakhs
Purchase of own
shares or buy back
Company &
Officer in default
– Rs. 1 Lakh
Rs. 3 Lakhs
SAXENA & SAXENA
9
Section
74
77-87
88
Particulars
Minimum Penalty
Maximum Penalty
Repayment of
deposit
Company –
Rs.1.00 crores
Rs.10.00 crores
Officer in default –
Rs 25 Lakhs
Rs.2.00 crores
Registration of
charges
Register of Members
Company –
Rs. 1 Lakh
Officer in default–
Rs. 25000
CompanyRs. 50,000
If default continues
SAXENA & SAXENA
Rs. 10 Lakhs
Rs. 1 Lakh
Rs. 3 Lakhs
Rs. 1000 everyday
10
Section Particulars
92
Annual Return
96-98 Annual General
Meeting
102
Explanatory
Statement
Minimum Penalty Maximum Penalty
Company &
Officer in default
– Rs. 50,000
Rs. 5 Lakhs
Company &
Officer in default Rs. 1 Lakh
(Rs. 5000 for
everyday during
which default
continues)
Director,
Promoter,
manager or KMP
SAXENA & SAXENA
50,000 or 5times
amount of benefit
(whichever is more)
11
Section
117
118
Particulars
Minimum Penalty
Maximum Penalty
Resolutions and
agreements to be filed
Company –
Rs. 5 Lakhs
Rs. 25 Lakhs
Officer in default–
Rs. 1 Lakh
Rs. 5 Lakhs
Company
Officer in default
Rs. 25000
Rs. 25000
Rs. 5000
Rs. 1 Lakh
Company –
Rs. 1 Lakh
Rs. 5 Lakhs
Minutes
Tampering of minutes
121
Report on AGM
Officer in default–
Rs. 25000
SAXENA & SAXENA
Rs. 1 Lakh
12
Section Particulars
124
Unpaid Dividend
Account
Minimum Penalty
Maximum Penalty
Company –
Rs. 5 Lakhs
Rs. 25 Lakhs
Officer in default–
Rs. 1 Lakh
Rs. 5 Lakhs
127
Punishment for failure Officer – Rs. 1000
to distribute dividend for everyday
128
Books of accounts
etc., to be kept by
company
Officer
Rs. 50,000
SAXENA & SAXENA
Rs. 5 Lakhs
13
Section
129
134
137
140
Particulars
Minimum Penalty
Maximum Penalty
Financial Statement
All the Directors
Rs. 50,000
Rs. 5 Lakhs
Company –
Rs. 50,000
Rs. 25 Lakhs
Officer in default–
Rs. 50,000
Rs. 5 Lakhs
Company –
Rs. 1,000 everyday
Rs. 10 Lakhs
Officer in default–
Rs. 1Lakh
Rs. 5 Lakhs
Financial Statements,
Board Report
Copy of financial
statement to filed with
registrar
Removal, Resignation of Auditor- Rs. 50,000
Auditor and giving of
SAXENA & SAXENA
Special Notice
Rs. 5 Lakhs
14
Section Particulars
Minimum Penalty
Maximum Penalty
147
Contravention of
Chapter X relating to
Audit or Auditors
Company-Rs.
Rs. 5 Lakhs
25,000
Officer in default –
Rs. 10,000
Rs. 1 Lakh
AuditorRs. 25,000
Rs. 5 lakhs
157
Company to inform
DIN to registrar
CompanyRs. 1 Lakh
Rs. 25,000
Officer in default –
Rs. 25,000
Rs. 1 Lakh
165
Number of
Directorship
Director-Rs. 5000 Rs. 2500 for each
for each day
day
SAXENA & SAXENA
15
Section Particulars
Minimum Penalty
Maximum Penalty
172
Contravention of any
section of Chapter XI
(appointment &
Qualification of
Directors)
CompanyRs. 5 Lakhs
Rs. 50,000
Officer in default –
Rs. 50,000
Rs. 5 Lakhs
173
Meetings of Board
Officer responsible Rs. 25,000
177178
Audit Committee,
Nomination &
Remuneration
Committee and
Stakeholder
Relationship
Committee
CompanyRs. 5 Lakhs
Rs. 1 Lakh
Officer in default –
Rs. 25,000
Rs. 1 Lakh
SAXENA & SAXENA
16
Section Particulars
Minimum Penalty
Maximum Penalty
184
Disclosure of Interest
Director – Rs. 50,000
Rs. 1 Lakh
185
Loan to Directors
CompanyRs. 5 Lakhs
Director or other
person– Rs. 5 Lakhs
Rs. 25 Lakhs
Rs. 25 Lakhs
186
Loan & Investment by
company
CompanyRs. 5 Lakhs
Rs. 25,000
Officer in default – Rs.
25,000
Rs. 1 Lakh
187
Investment of
company in its own
name
CompanyRs. 25 Lakhs
Rs. 25,000
Officer in default – Rs.
25,000
Rs. 1 Lakh
SAXENA & SAXENA
17
Section Particulars
Minimum Penalty
Maximum Penalty
188
Related Party
Transactions
Any director –
Rs. 25000
Rs. 5 Lakhs
189
Register of contracts Every Director
in which Directors are
interested
Rs. 25,000
194
Prohibition on forward Director or KMP
dealings in securities Rs. 1 Lakh
195
Prohibition on insider
trading of securities
Any person
Rs. 5 Lakhs
SAXENA & SAXENA
Rs. 5 Lakhs
Rs. 25 Crores or
3 times the amount
Whichever is
higher
18
Section Particulars
197
203
Minimum Penalty
Maximum Managerial Any person
Remuneration
Rs. 1 Lakh
Appointment of KMP
Company
Rs. 1 Lakh
Maximum Penalty
Rs. 5 Lakhs
Rs. 5 Lakhs
204
Secretarial Audit for
bigger companies
Company or officer
of Co. or CS in
practice Rs. 1 Lakh Rs. 5 Lakhs
207
Conduct of Inspection
and Inquiry
Director or officer
Rs. 25000
SAXENA & SAXENA
Rs. 1 Lakh
19
Section Particulars
221
232
242
Freezing of Assets of
company on inquiry
and investigation by
Tribunal
Merger &
Amalgamation
Contravention of order of
Tribunal
Minimum Penalty
CompanyRs. 1 Lakh
Officer in default –
Rs. 25,000
Maximum Penalty
Rs. 25 Lakhs
CompanyRs. 1 Lakh
Officer in default –
Rs. 1 Lakh
Rs. 25 Lakhs
CompanyRs. 1 Lakh
Officer in default –
Rs. 25000
Rs. 25 Lakhs
SAXENA & SAXENA
Rs. 5 Lakhs
Rs. 3 Lakhs
Rs. 1 Lakh
20
Section Particulars
247
Minimum Penalty
Valuation by
Valuer – Rs 25000
Registered Valuer
If intention to defraud Rs. 1Lakh
267
Revival &
Rehabilitation of Sick
Companies
Any person who
violated section or
order of Tribunal
274
Direction for filing
Statement of Affairs
Director or officer
in default
Rs. 25000
302
Dissolution of
Company by Tribunal
Maximum Penalty
Rs. 1 Lakh
Rs. 5 Lakh
Rs. 10 Lakhs
Rs. 5 Lakhs
Company
Rs. 5000 for every
Liquidator for non day
filing of order with
registrar
SAXENA & SAXENA
21
Section Particulars
Minimum Penalty
Maximum Penalty
305
Declaration of
Solvency
Director Rs. 50,000 Rs. 3 Lakhs
306
Meting of Creditors
CompanyRs. 2 Lakhs
Rs. 50,000
Officer in default –
Rs. 50,000
Rs. 2 Lakhs
307
Publication of
Resolution of
Voluntary winding up
Company
Officer in default
312
Notice of
Company
appointment of
Officer in default
liquidator to Registrar
SAXENA & SAXENA
Rs. 5000 for
everyday
Rs. 500 for
everyday
22
Section Particulars
Minimum Penalty
Maximum Penalty
318
Final Meeting and
Dissolution of
Company
Company
Liquidator
Rs. 1 Lakh
337
Penalty for fraud by
Officers
Any person
Rs. 1 Lakh
Rs. 3 Lakhs
347
Disposal of Books and Any person
Papers of company
Rs. 50,000
379393
Companies
incorporated outside
India
CompanyRs. 3 Lakhs
Rs. 1 Lakh
Officer in default –
Rs. 20,000
Rs. 5 Lakhs
SAXENA & SAXENA
23
Section Particulars
Minimum Penalty
Maximum Penalty
447
Punishment for Fraud
Any person guilty
of Fraud
Amount involved in
Fraud
3 times amount
involved in Fraud
449
Punishment for False
Evidence
Any Person
Rs. 10 Lakhs
450
Punishment where no
specific penalty or
punishment provided
Company & any
officer
Rs. 10,000 for
everyday
If default continues Rs. 1000 for
everyday
SAXENA & SAXENA
24
Section Particulars
453
454
Minimum
Penalty
Punishment for improper Any person
use of “limited” or
Rs. 500 for every
“private limited”
day
Adjudication of
Penalties
Company
Rs. 25000
Officer in default
Rs. 25000
SAXENA & SAXENA
Maximum
Penalty
Rs. 2000 for
everyday
Rs. 5 Lakhs
Rs. 1 Lakh
PROSECUTION
25

Some of the important Sections in the new Companies Act,
2013 where prosecution is provided:-
Section Particulars
Minimum
Maximum
8
Non-Profit making
companies
_
3 yrs
26
Matters to be stated
in Prospectus
-
3 yrs
SAXENA & SAXENA
26
Section Particulars
Minimum
Maximum
40
Securities to be dealt in Stock
Exchange
_
1 yr
48
Variation of Shareholders
rights
_
6 months
53
Prohibition on issue of Shares
at discount
_
6 months
59
Rectification of Register of
Members
_
1 yr
68
Purchase of own shares or buy
back
_
1 yr
SAXENA & SAXENA
27
Section Particulars
Minimum
Maximum
77-87 Registration of Charges
_
6 months
92
Annual Return
_
6 months
118
Tampering with minutes of
meeting
_
2yrs
127
Failure to distribute dividends
_
2yrs
128
Books of Accounts, etc to be
kept by company
_
1yrs
129
Financial Statements
_
1yrs
SAXENA & SAXENA
28
Section Particulars
Minimum
Maximum
134
Financial Statement. Board’s
Report etc
_
3yrs
137
Copy of financial Statements to
be filed with Registrar
_
6 months
147
Contravention of Chapter X relating to
Audit or Auditors
_
1yr
167
Vacation of office of Director
_
1yr
_
1yr
_
1yr
177-178 Audit Committee, Nomination &
Remuneration Committee and
Stakeholder Relationship Committee
184
Disclosure of Interest by Director
SAXENA & SAXENA
29
Section Particulars
185
Minimum
Maximum
Loan to Directors
_
6 months
186
Loan & Investment by
Company
_
2 yrs
187
Investment of company to be
held in its own name
_
6 months
188
Related Party Transactions
_
1 yr
194
Prohibition on forward
dealings in securities
_
2 yrs
195
Prohibition on Insider Trading
of Securities
_
5 yrs
SAXENA & SAXENA
30
Section Particulars
Minimum
Maximum
207
Conduct of Inspection and
Inquiry
_
1 yr
221
Freezing of Assets of company
on inquiry and investigation by
Tribunal
_
3 yrs
232
Merger & Amalgamation of
Companies
_
1 yr
242
Powers of Tribunal
_
6 months
245
Class Action as taken by
Tribunal
_
3 yrs
SAXENA & SAXENA
31
Section Particulars
Minimum
Maximum
247
Valuation by registered valuer
(intention to defraud the
company)
_
1 yr
267
Revival & Rehabilitation
(Penalty + prosecution)
_
7 years
274
Directions for filing Statement of _
Affairs
6 months
305
Declaration of Solvency in case
of proposal to wind up
voluntarily
3 yrs
5yrs
306
Meeting of Creditors
_
6 months
SAXENA & SAXENA
32
Section Particulars
Minimum
Maximum
336
Offences by officers of
companies liquidation
3 yrs
5yrs
337
Penalty for fraud by officers
1 yr
3yrs
338
Liability where proper accounts
are not kept
(Penalty + Prosecution)
1 yr
3yrs
347
Disposal of Books and papers
of company
_
6 Months
379393
Companies incorporated outside _
India
6 Months
SAXENA & SAXENA
33
Section Particulars
447
Minimum
Maximum
Punishment for fraud
6 months
10yrs
Where involves public interest
3yrs
10 yrs
449
Punishment for false evidence
3yrs
7yrs
454
Adjudication of Penalties
_
SAXENA & SAXENA
6 months
34
Defaults punishable under Section
447
SECTION PARTICULARS
7
company incorporated by false or fraudulent
manner
8
company contravenes any condition upon which
license was issued
34,35,36 misleading statement in prospectus
38
personnation for acquisition of securities
46
defraud intention in issue of Share certificate
SAXENA & SAXENA
35
SECTION PARTICULARS
213
if proved after investigation that business
conducted with intention to defraud
229
furnishing of false statement,
Mutilation,
destruction of documents
251
Fraudulent application for removal of name
339
Fraudulent conduct of business
448
Punishment for false statement
SAXENA & SAXENA
PROCEDURE
36




Penalty to be adjudicated not below rank of
Registrar.
To give reasonable opportunity
Appeal to RD within 60 days
Compounding – of fine only – (Section 441)
 By
Tribunal
 By RD where maximum fine does not exceed Rs. 5
Lakhs
SAXENA & SAXENA
THANK YOU
37
SAXENA & SAXENA