Penalties after incorporation of the company - Part 3

Nature of Default

Defaulting party

Civil Liability

Criminal Liability (Imprisonment)

Sec 206 - Business of a company has been or is being carried on for a fraudulent or unlawful purpose Company fails to furnish any information or explanation or produce any document required by the registrar.

Every officer in default Company and every officer in default

Min: Amount involved in the fraud Max:3 times the amount involved INR 1 Lakh In case of continuing failure INR 5 hundred for every day of default

Min:6 Months Max:10 Years *Fraud involving public interest: Min: 3 years

Sec 207-Director/ officer of the company disobeys the direction issued by the Registrar or the inspector in matters related to inspection and enquiry

Director/Officer

Min: INR 25 thousand Max: INR 1 Lakh &

Max: 1 year

Sec 213- Any person concerned in the formation of the company or the management of its affairs have in connection therewith been guilty of fraud

Every officer in default & persons concerned in the formation of the company

Min: Amount involved in the fraud Max:3 times the amount involved &

Min:6 Months Max:10 Years *Fraud involving public interest: Min: 3 years

Sec 217- Disobeying the orders issued by Registrar/inspector A person fails without reasonable cause or refuses -to produce information OR-to appear personally or answer any question OR-to sign the notes of any examination

Director or officer Any person

Min: INR 25 thousand Max: INR 1 Lakh Min: INR 25 thousand Max: INR 1 Lakh In case of continuing failure INR 2 thousand for every day of default &

Max: 6 months

Sec 221 - Removal/transfer of assets/fund/property in contravention to orders of the tribunal

Company Every officer in default

Min: INR 1 Lakh Max: INR 25 Lakhs Min: INR 50 thousand Max: INR 5 Lakhs OR

Max: 3 years OR Both

Sec 222 - Securities issued/transferred in contravention to orders of the tribunal post restrictions imposed by the tribunal

Company Every officer in default

Min: INR 1 Lakh Max: INR 25 Lakhs Min: INR 25 thousand Max: INR 5 Lakhs OR

Max: 6 months OR Both

Sec 229 - Penalty for furnishing a false statement, mutilation, destruction of documents

Officer/Employee

Min: Amount involved in the fraud Max:3 times the amount involved &

Min:6 Months Max:10 Years *Fraud involving public interest: Min: 3 years

Sec 232-Contravention of provisions related to merger and amalgamation of companies

Transferor /Transferee Company Every officer in default

Min: INR 1 lakh Max: INR 25 Lakhs Min: INR 1 lakh Max: INR 3 Lakhs OR

Max: 1 year OR Both

Sec 238-Issuance of circular without registering the same with the registrar involving a transfer of shares.

Director

Min: INR 25 thousand Max: INR 5 Lakhs

Sec 242- Alteration in MOA/Articles inconsistent with the order of the tribunal.

Company Every officer in default

Min: INR 1 Lakh Max: INR 25 Lakhs Min: INR 25 thousand Max: INR 1 Lakh

Max: 6 months OR Both

Sec 243-Acting as a managing director/director/manager in contravention of the order of the tribunal.

Managing director/director/manager/every director knowingly contravening

INR 5 Lakhs OR

Max: 6 months OR Both

Sec 245- Failure to comply with the orders of the tribunal pertaining to class actions.

Company Every officer in default

Min: INR 5 Lakh Max: INR 25 Lakhs Min: INR 25 thousand Max: INR 1 Lakh &

Max: 3 years

Sec 247 - Contravention of provisions related to valuation by registered valuers Defraud company/members

Valuer Valuer

Min: INR 25 thousand Max: INR 1 lakh Min: INR 1 Lakh Max: INR 5 Lakhs &

Max: 1 year

Sec 249 - Filing for removal of name from the register of companies in contravention to provisions enshrined in this section

Company

Max: INR 1 Lakh

Sec 251-Fraudulent application for removal of a name.

Persons in charge of the management of the company

Min: Amount involved in the fraud Max:3 times the amount involved &

Min:6 Months Max:10 Years *Fraud involving public interest: Min: 3 years

Sec 267 - 1)  Violation of Provisions of chapter XIX or order of tribunal/appellate tribunal 2) Provides False evidence/false statement before the Tribunal/Appellate Tribunal 3) Attempts to tamper with the records of reference or appeal filed under this Act

Any person

Max: INR 10 Lakhs &

Max: 7 years

Sec 274 -Failure to file the statement of affairs.

Director or officer in default

Min: INR 25 thousand Max: INR 5 Lakhs OR

Max: 6 months OR Both

Sec 15 - Failure to note  alteration in every copy of the articles or memorandum as the case may be

Company and every officer in default

INR 1 thousand for every copy issued without alteration

Sec 447- Punishment for fraud

Any person guilty of fraud

Min: Amount involved in the fraud Max:3 times the amount involved &

Sec 448- Punishment for false statement

Any person guilty of fraud

Min: Amount involved in the fraud Max:3 times the amount involved &

Sec 449-Punishment for false evidence

Any person

Max: INR 10 lakhs &

Sec 450-Punishment where no specific penalty or punishment is provided

Company & every officer un default

INR 10 thousand In case of continuing failure INR 1 thousand  for every day of default

Sec 451 - Punishment in case of repeated default ( Same offence within a period of 3 years)

Company/Officer

Twice the amount of fine for such offence

Sec 452 - Punishment for wrongful withholding of Property

Officer/Employee

Min: INR 1 Lakh Max: INR 5 Lakhs

Punishment for improper use of “Limited” or “Private Limited”

Person

INR 500 to INR 2000 for every day of usage of the name

Sec 454 - Non-payment of  the penalty imposed by the adjudicating officer or the Regional Director within a period of ninety days from the date of the receipt of the copy of the order

Company Officer

Min: INR 25 thousand Max: INR 5 Lakhs Min: INR 25 thousand Max: INR 1 Lakh OR

Sec 464 - Formation of association or partnership of persons exceeding a certain number

Every member of an association or partnership carrying on business

Max: INR 1 Lakh