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IMPORTANT PENALTIES
SEC PROVISIONS W.R.T. PENALTY ON PERSON PENALTY ON COMPANY
7(5) INCORPORATION OF Person who made application NIL
7(6) COMPANY shall be liable u/s 447
8 SECTION 8 COMPANY DIR+OID-fine (25K-25 Lacs) Company shall be liable for fine
(CONTRAVENTION OF (10 lacs-1crore)
PROVISIONS)
8 SECTION 8 COMPANY OID shall be liable u/s 447 NIL
(IN CASE OF FRAUD))
15 ALTERATION SHALL BE O-I-D shall be liable for fine 1000/- Company shall be liable for fine
NOTED IN EVERY COPY copy 1000/-copy
34 MIS-STATEMENT IN
Every person who authorises issue
PROSPECTUS of prospectus shall be liable u/s
447
35 MIS-STATEMENT IN person who authorises issue of Company shall be liable to
PROSPECTUS prospectus shall be liable to compensate loss of investors
compensate loss of investors
42 PRIVATE PLACEMENT Pro. & Dir shall be liable for fine Company shall be liable for fine
(amount raised/2 crores)---lower (Amount raised/2 crores)---lower
53 SHARES AT DISCOUNT OID shall be liable for fine Company shall be liable for fine
(Amount raised/5 lacs)---LOWER (Amount raised/5 lacs)---LOWER
68 BUY-BACK OID--fine (1-3 Lacs) Company shall be liable for fine (1-3
lacs)
64 NOTICE TO REG. FOR O-I-D shall be liable for fine 500/- Company shall be liable for fine
ALTERATION OF CAP. day (Max. 1 lac) 500/-day (Max. 5 lacs)
76A CONTRAVENTION OF Person--imprisonment (upto 7 Company shall be liable for fine
SECTION 73 OR 76 years) and fine (25 Lacs-2 crores) (Min:-1 crore/2xdeposit--lower)
(Max-10 cr)
86 CHAPTER OF CHARGES OID—fine of 50000 Company shall be liable for fine of 5
lacs
92 FAILS TO FILE ANNUAL OID shall be liable for fine 10,000 Company shall be liable for fine
RETURN + 1000/day= Max. 50000 10,000 + 1000/day= Max. 200000
94 PLACE OF KEEPING & O-I-D shall be liable for fine 1000/- Company shall be liable for fine
INSPECTION OF ROM day (Max. 1 lac) 1000/-day (Max. 1 lac)
99 FAILS TO CONVENE AGM OID shall be liable for fine Company shall be liable for fine
(1 LAC) + 5000/day (1 LAC) + 5000/day
127 FAILURE TO PAY DIVIDEND Directors--imprisonment (upto 2
years) and fine (1000/day)
128 BOOKS OF ACCOUNT ETC. IF MD, WTD(F), CFO, OP Commits
default, then they shall be liable--
imprisonment (upto 1 year) or fine
(50K-5Lac) or Both
ANKIT OBEROI 1
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129 FINANCIAL STATEMENT If Company contravenes, then
MD, WTD(F), CFO, OP and in case
of their absence, all directors shall
be liable-- fine (50K-5Lac)
134 BOARD REPORT O-I-D---Company-3 Lacs Company shall be liable for fine
Of 50000
135 CSR For officer, fine which equals For company, fine which equals to
1/10th of the amount to be twice the amount to be transferred
transferred in fund or ₹ 2,00,000, in fund or ₹ 1,00,00,000, whichever
whichever is less. is less.
140 FAILURE TO FILE Auditor Shall be liable for fine
RESIGNATION BY AUDITOR (50,000/Remuneration--Lower)
+ 500/day (Max. 2 lacs)
147 PENALTY IN CONTRAV. OF Auditor Shall be liable for fine
139, 143-145 (ON (Min-25,000)
AUDITOR) (Max-5 Lacs/4xRem.---lower)
147 PENALTY IN CASE OF Auditor Shall be liable for
FRAUD OR DECEIT Imprisonment:-1year and
fine (Min-50,000)
(Max-25 Lacs/8xRem.---lower)
ANKIT OBEROI 2
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LIABLITY FOR FRAUD U/S 447
SEC NO. TITLE OFFENCE
Section INCORPORATION OF If any person furnishes any false or incorrect particulars of any
7(5) COMPANY: information or suppresses any material information, of which he is aware
&7(6) in any of the documents filed with the Registrar in relation to the
registration of a company, he shall be liable for action under section 447.
SECTION FORMATION OF Every officer in default shall be liable for action under section 447 when
8 COMPANY WITH it is proved that the affairs of the company were conducted fraudulently.
CHARITABLE OBJECT
SECTION CRIMINAL LIABILITY Where a prospectus, issued, circulated or distributed under this Chapter,
34 FOR MIS- includes any statement which is untrue or misleading in form or context
STATEMENTS IN in which it is included or where any inclusion or omission of any matter is
PROSPECTUS likely to mislead, every person who authorizes the issue of such
prospectus shall be liable under section 447.
SECTION PUNISHMENT FOR Any person who, either knowingly or recklessly makes any statement,
36 FRAUDULENTLY promise or forecast which is false, deceptive or misleading, or
INDUCING PERSONS deliberately conceals any material facts, to induce another person to
TO INVEST MONEY invest money shall be liable for fraud
SECTION PUNISHMENT FOR Any person who makes or abets making of an application in a fictitious
38 PERSONATION FOR name to a company for acquiring, or subscribing for, its securities
ACQUISITION ETC
OF SECURITIES
SECTION CERTIFICATE OF If a company with intent to defraud issues a duplicate certificate of
46 SHARES shares, every officer of the company who is in default shall be liable for
action under section 447.
SECTION TRANSFER AND If any depository or depository participant, with an intention to defraud a
56 TRANSMISSION OF person, has transferred shares, it shall be liable under section 447.
SECURITIES:
66 REDUCTION OF If there is any false representation of amount or nature of debt of the
SHARE CAPITAL creditor or the name of any creditor is concealed, then penalty under
section 447 shall apply.
76A INTENTION TO If there is an intent to deceive the depositors, the Officers in default shall
COMMIT FRAUD be liable for fraud u/s 447
U/S 73/76
86 INTENTION TO If any person wilfully furnishes any false or incorrect information or
COMMIT FRAUD IN knowingly suppresses any material information, required to be registered
CASE OF CHARGES in accordance with the provisions of section 77, he shall be liable for
action under section 447.".
90 SIGNIFICANT If any person wilfully furnishes any false or incorrect information or
BENEFICIAL suppresses any material information of which he is aware in the
OWNERSHIP declaration made under this section, he shall be liable to action under
section 447.'.
ANKIT OBEROI 3
| Ankit oberoi
140(5) CHANGE OF An auditor, whether individual or firm, against whom final order has
AUDITOR ON been passed by the Tribunal under this section shall not be eligible to be
ORDER OF appointed as an auditor of any company for a period of five years from
TRIBUNAL the date of passing of the order and the auditor shall also be liable for
action under section 447.
ANKIT OBEROI 4
