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WORKSHOP ON COMPANIES ACT, 2013 Challenges and Opportunities for Chartered Accountants PART - 2 WIRC - AHMEDABAD - 26.10.2013 1.

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Presentation on theme: "WORKSHOP ON COMPANIES ACT, 2013 Challenges and Opportunities for Chartered Accountants PART - 2 WIRC - AHMEDABAD - 26.10.2013 1."— Presentation transcript:

1 WORKSHOP ON COMPANIES ACT, 2013 Challenges and Opportunities for Chartered Accountants PART - 2 WIRC - AHMEDABAD - 26.10.2013 1

2 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 2 PENALTIES / PUNISHMENT FOR DEFAULTS FOR PROVISIONS w.e.f. 12.09.2013

3 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 3 SectionOffencePenalty / Punishment 33 Issue of application form for purchase of any of the securities of a Company un-accompanied by an abridged prospectus other than for underwriting agreement or for securities not offered to the public or Not furnishing a prospectus on a request made by any person before the closing of the subscription list and the offer Company- Penalty of fifty thousand rupees for each default [section 33(2) ] 34 Issue, circulation or distribution of a prospectus containing any statement which is untrue or misleading in form or context or any inclusion or omission of any mater in such prospectus which is likely to mislead. Every person who authorized issue of such prospectus liable for action under section 447 titled ‘Punishment for fraud’. 36 Any person knowingly or recklessly making any statement, promise or forecast which is false, deceptive or misleading or who deliberately conceals any material facts, to induce another person for entering into (a) an agreement for acquiring, disposing of, subscribing for or Such person is liable for action under section 447 titled ‘Punishment for fraud’.

4 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 4 SectionOffencePenalty / Punishment 36Underwriting securities or (b) for entering into an agreement to secure a profit to any of parties from the yield of securities or by reference to fluctuations in the value of securities or (c) for entering into any agreement for or with view to obtaining credit facilities from any bank or financial institution. 38Any person who : Makes or abets making of any application in a fictitious name to a company for acquiring or subscribing for its securities or Makes or abets making multiple applications to the company in different names or in different combinations of his name or surname for acquiring or subscribing for its securities or Otherwise induces directly or indirectly a company to allot or register any transfer of securities to him or to any other person in a fictitious name. Such person is liable for action under section 447 titled ‘Punishment for fraud’. [ Section 38(1) ] Where a person has been convicted under section 38, the court may also order disgorgement of gain, if any, made by and seizure and disposal or the securities still in possession of such person (section 38(3))

5 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 5 SectionOffencePenalty / Punishment 39(3)Failure to return to the applicant of securities within such time and in such manner as may be prescribed the amount received if the amount stated in the prospectus as the minimum amount has not been subscribed and if the sum payable on application is not received within a period thirty days from the date of issue of prospectus or such other time limit as may be specified by SEBI Fault continues or one lakh rupees whichever is less (Section 39(5)] 39(4)Failure to file with the Registrar a return of allotment of securities in such manner as may be prescribed Company and its officer in default – penalty for each default, of one thousand rupees for everyday during which default continues or one lakh rupees whichever is less (Section 39(5)) 40 Default to make an application to one or more recognized stock exchanges before the issue of a prospectus for person for the securities to be dealt whit in such stock exchange or Default in stating the name or names of stock exchange in which the securities shall be dealt with or Company – fine not less than five lakh rupees which may extend to fifty lakh rupees. Officer in default – imprisonment for a term which may extent to one year or with fine not less than fifty thousand

6 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 6 SectionOffencePenalty / Punishment 40 Default in complying with requirements that all application monies received by the company to be kept in separate bank account in a schedule bank and not to be utilized for any purpose other than adjustment against allotment of securities or for refund to applicants where company is unable to allot securities. Rupees which may extend to three lakh rupees or with both (Section 40(5) ) 57A person deceitfully personates the owner of any share or interest or any share warrant or coupon issued in pursuance of this Act obtains or attempts to obtain any such share, interest, coupon, share warrant or any money due to such owner. Imprisonment for a term not less than one year which may extend to three years and with fine not less than one lakh rupees which may extend to five lakh rupees. (Section 57) 58(6)A person contravenes the order of Tribunal regarding transfer or transmission of any right to securities or interest of a member in a private company or a public company. Imprisonment for term not less than one year which may extend to three years and with fine not less than one lakh rupees which may extend to five lakh rupees (Section 58(6) )

7 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 7 SectionOffencePenalty / Punishment 58(6)Also Tribunal can invoke provisions of contempt of courts Act, 1971 and punish for contempt section 425 59(5)Default in complying with the order of the Tribunal regarding transfer or transmission or rectification of the register of members and direction to the company to pay damages, if any, sustain by the party aggrieved Company – Fine not less than one lakh rupees which may extend to five lakh rupees. Officer in default- Imprisonment for a term which may extend to on year or with fine not less than one lakh rupees which may extend to three lakh rupees or with both (Section 59(5) Also, Tribunal can invoke the provisions of contempt of courts act, 1971 and punish for contempt section 425

8 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 8 SectionOffencePenalty / Punishment 60(2)Notice/ Advertisement / other official publication / business letter, bill head or letter paper of company contains a statement of authorised capital without equally prominent statement of subscribed and paid- up capital. Company – penalty of ten thousand rupees for each default. Every Officer in default penalty of five thousand rupees for each default. (Section 60(2)} 68(11)Contravention of the provisions of section 68 regarding buy –back of shares of other securities of a company viz :- (a)Authorisation of buy-back contained in the articles. (b)(passing of special resolution authorizing the buy – back. exclusion for (b) – buy-back for ten percent or less of the total paid-up capital and free reserves of the company and approved by resolution by the Board of Directors at is meeting. Company – fine not less than one lakh rupees which may extend to three lakh rupees. Officer in default – imprisonment for a term which may extend to three years or fine not less than one lakh rupees which may extend to three lakh rupees or which both (Section 68(11).

9 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 9 SectionOffencePenalty / Punishment 68(11)(c ) the buy-back is twenty – five per cent or less of the aggregate of paid up capital and free reserves of the company. (d) buy-back of equity shares in any financial year is less than twenty-five percent of its total paid-up equity capital in that financial year. (e) Debt-equity ration after such buy-back is not more than twice the paid up capital and its free reserves unless specified at a higher ration by the central government. (f) Such shares and specified securities are fully paid up. (g) Such buy back by a company listed on any recognized stock exchange is in accordance with SEBI Regulation s and in respect of other company is in accordance with the rules as may be prescribed. (h) Such buy-back is not made within a period of one year from the date of closure of the preceding offer of buy back. (i) Notice of the meeting for such buy back contains an explanatory statement as prescribed for such resolution.

10 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 10 SectionOffencePenalty / Punishment 68(11)(j) Such buy back to be completed within one year from date of the passing of special resolution at the general meeting or resolution by the Board of Directors. (k) Such buy back is from the persons specified in section 68(5). (l) A declaration of solvency as prescribed in section 68(6) is filed with the Registrar and by the listed company also with SEBI duly verified as prescribed before making the buy back. (m) After buy back extinguish and physically destroy the shares or securities so bought back within seven days of completion of buy back. (n) Not to make a further issue of same kind of shares or other securities within six months except issue of bonus, shares or conversion of warrants, stock option scheme or sweat equity or conversion of preference shares or debentures into equity shares. (o) File with the Registrar a return of buy back within thirty days of completion of buy back and by a listed company also with SEBI.

11 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 11 SectionOffencePenalty / Punishment 68(11)Listed company’s buy back of shares or other specified securities not compliant with SEBI Regulations for buy back. Company fine not less than one lakh rupees which may extend to three lakh rupees. Officer in default – imprisonment for a term which may extend to three years or fine not less than one lakh rupees which may extend to three lakh rupees or with both [Section 68(11)] 86 Failure to register charges on or property or assets or undertaking (whether situated in or outside India, Whether tangible or intangible and whether charge created in our outside India) with the Registrar within thirty days of such creation, as may be prescribed or within a period three hundred days of such creation as may be allowed by the Registrar with prescribed additional fees. Company – fine not less than one lakh rupees which may extend to ten lakh rupees. Officer in default – imprisonment for a term which may extend to 6 months or with find not less than twenty five thousand rupees which may extend to one lakh rupees or with both. (section 86)

12 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 12 SectionOffencePenalty / Punishment 86 Failure to register with ROC modification of terms/ conditions or extend of operation of any change. Failure to register with ROC acquisition of property subject to change. Failure to give intimation of payment or satisfaction in full within thirty days such payment or satisfaction. Failure to keep at its registered office a register of charges in the prescribed manner and to allow inspection of such register. 91(2)Failure to give 7 days previous notice as prescribed or giving shorter notice and closing the register of members, or of debenture holders or of other security holders or Keeping such registers closed for any period or periods exceeding in aggregate 45 days in a year or exceeding 30 days at any one time. Company and every officer in default – penalties of five thousand rupees for every day during which the register is closed but not exceeding one lakh rupees [section 91(2)]

13 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 13 SectionOffencePenalty / Punishment 102Default in complying with the provisions of section 102 i.e.: (i)To set out an explanatory statement containing material facts of each item of special business to be transacted at a general meeting. (ii)To specify the nature of the concern or interest financial or otherwise of every director and the manager and of every other key managerial personnel and relatives of the said persons. (iii)To specify any other information and facts that may enable the members to understand the meaning scope and implications of the items of business and to take a decision thereon. (iv)Where any item of special business to be transacted at the meeting relates or affects any other company, the extent of shareholding interest in that other company of every promoter, director, manager and of every other key managerial personnel of the first mentioned company also to be set out in explanatory statement if such shareholding is not less than two percent of the paid up share capital of that company. (i)On account of non- disclosure or in sufficient disclosure of concern or interest of any promoter director, manager or other key managerial personnel or their relatives – any benefit accruing to such person shall be held in in trust for the company and such person is liable to compensate the company to the extent of the benefit received by him. (section 102(4)) (ii)Every promoter director, manager, or other key managerial personnel who is in default - fine which may extend to fifty thousand rupees or five times the amount of benefit accruing to such person, or any of his relatives whichever is more (section 102(5))

14 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 14 SectionOffencePenalty / Punishment 102(v) Where any document is referred to any business to be transacted at the meeting, specification of time and place for inspection of such document. 105(3)Default in making a statement regarding members right to vote by proxy(ies) with reasonable prominence in notice calling the meeting of a company. (Applicable to co. having share capital/ co. whose articles allow proxy) Office in default - Fine which may extend to ì 5,000 105(5)Invitations to members to appoint as proxy a person or one or more persons mentioned in invitations & Invitations issued at Company’s expense. Every officer of the co. who issues such invitation or willfully authorized or permits their issue – Fine which may extend to ì 1,00,000

15 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 15 SectionOffencePenalty / Punishment 111Default to give notice to members of any resolution to be moved or to circulate a statement relating to thereat as per requisition of members in conformity with the provisions of section 111. Company and every officer in default penalty of twenty five thousand rupees. (Section 111(5) 127Failure to distribute dividend declared by payment or posting warrants thereof within thirty days from the date of declaration of the shareholder entitled for such dividend. (provisions not applicable in case specified in the proviso to Section 127) Every director of the company knowingly being a party to the default - imprisonment which may extent to two years and with fine not less than one thousand rupees for every day during which such default continues. Company - to pay simple interest at the rate of eighteen percent per annum during the period for which such default continues (Section 127)

16 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 16 SectionOffencePenalty / Punishment 133 (4)(c)Where CA/CA firm's professional or other misconduct is proved in proceedings before NFRA Penalty not less than Rs. 1,00,000 but upto 5 times of the fees received - Individual CAs Penalty not less than Rs.10,00,000 upto 10 times frees received - CA firms / LLPs Debarring member / firm from practice for minimum 6 months and maximum 10 years as decided by NFRA 161(1)Appointing as additional director a person who fails to get elected as director If the articles of a company authorize the Board of Directors, it may appoint any person as an additional director at any time to hold office upto the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier. The person to be appointed shall not be a person who fails to get appointed as a director in a general meeting, Company and every officer-in- default for contravention - fine not less than fifty thousand rupees which may extend to five lakh rupees (section 172)

17 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 17 SectionOffencePenalty / Punishment 161(2)Appointment of a person as alternate director for more than one director The board of Director if authorized by its articles, or by a resolution passed by the company in general meeting appoint a person not being the alternate Director for any other director in the company, to act as an alternate director for a director who is absent for a period not less than three months from India Company and every officer-in- default for contravention - fine not less than fifty thousand rupees which may extend to five lakh rupees (section 172)

18 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 18 SectionOffencePenalty / Punishment First Provision to 161(2) Alternate director not qualified to be ID is appointed alternate director for ID The person to be so appointed for an independent director should be qualified for appointment as an independent director Company and every officer-in- default for contravention - fine not less than fifty thousand rupees which may extend to five lakh rupees (section 172) Second Provision to 161(2) Alternate director not vacating office an original director returning to India An alternate director shall not hold office for a period longer than permissible to the director in whose place he is appointed. He shall vacate his office if and when the director in whose place he has been appointed returns to India. Company and every officer-in- default for contravention - fine not less than fifty thousand rupees which may extend to five lakh rupees (section 172) 162(1 ) Moving Single resolution for appointment of 2 or more persons as directors without consent of meeting for such motion At a general meeting of a company moving a single resolution for the appointment of two or more persons as directors of the company without first getting the proposal to move such a motion agreed to at the meeting without any vote being cast against it. Company and every officer-in-default for contravention - fine not less than fifty thousand rupees which may extend to five lakh rupees (section 172)

19 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 19 SectionOffencePenalty / Punishment 180(4) Proviso to 180(4) Such special resolution under section 180(1) (a) may stipulate conditions including conditions regarding the use, disposal or investment of sale proceeds resulting from the transactions. This sub-section shall not be deemed to authorise the company to effect any reduction in capital except in accordance with the provisions of this act. Company and every officer in default fine which may extend to ten thousand rupees or further fine which may extend to one thousand rupees for every day after first during which the contravention continue. (Section 450). 182A Government company contributing any amount/amounts to a political party in violation of the prohibition u/s 182 Company-fine-five times the amount of such contribution every officer in default- imprisonment for a term which mat extent to six months and with fine which may amount to five times the amount so contributed. [Section 182(4)]

20 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 20 SectionOffencePenalty / Punishment 182 182(1) A non-Government company in existence for less than 3 financial years making contribution to political party Default in complying with the following provisions relating to contribution to any political party by a company (which is in existence for at least 3 financial years) directly or indirectly:- Company-fine-five times the amount of such contribution every officer in default- imprisonment for a term which may extend to six months and with fine which may amount to five times the amount so contributed. [Section 182(4)] Company-fine-five times the amount of such contribution every officer in default- imprisonment for a term which may extend to six months and with fine which may amount to five times the amount so contributed. [Section 182(4)]

21 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 21 SectionOffencePenalty / Punishment 1 st Provision to 182(1) 2 nd Proviso to 182(1) 182 (2) 182(3) (i)The aggregate of amount so contributed by the company in any financial year shall not exceed seven and half per cent of its average net profits during the three immediately preceding financial years. (ii)Such contribution shall be approved by the Board of Directors by passing a resolution at its meeting. (iii) A donation or subscription or payment given by a company to any person for the political purpose as well as expenditure specified in section 182(2)(b) shall be deemed to be contribution for a political purpose. (iv) Disclosure in its profit and loss account any amount or amounts contributed by it to any political party during the financial year to which that account relates with particulars of the total amount contributed and the name of the party to which such amount has been contributed. Note: A Government company and a company which has been in existence for less than three financial years cannot contribute to such funds.

22 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 22 SectionOffencePenalty / Punishment 183(2)Failure to disclose in its profit and loss account the total amount or amounts contributed by it to the National Defence Fund or any other Fund approved by the Central Government for the purpose of national defence during the Financial Year to which the amount relates. Company and every officer in default fine which may extend to ten thousand rupees or further fine which may extend to one thousand rupees for every day after first during which the contravention continue. [Section 450] 185(1) Company giving loan to director or specified person – A Company shall directly or indirectly not give any loan, loan represented by book debt, to any director or to any other person in whom he is interested or give any guarantee or provide any security for any loan taken by him or such other person. Company – fine not less than five lakh rupees which may extend to twenty five lakh rupees. Director or other person to whom loan, guarantee or security is given or provided in connection with loan taken by him or other person – imprisonment which may extend to six months or fine not less than five lakh rupees which may extend to twenty five lakh rupees or with both (Section 185(2))

23 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 23 SectionOffencePenalty / Punishment Proviso To 185(1) Exception : This prohibition not applicable in the following cases : (a)Giving a loan to managing or whole time director as part of the conditions of service applicable to all employees or pursuant to any scheme approved by the members by a special resolution. (b)Giving of loan etc. by a company which in its ordinary course of business provides such loan, guarantee or provide security for such loans and it charges interest at a rate not less than the bank rate declared by the Reserve Bank of India. 192(1) Non-compliance with restrictions on non cash transactions involving directors of the company / its holding company/ its subsidiary / person connected with him. A company shall not enter into an agreement by which (a) a director of the company or its holding subsidiary or associates company or a person connected with him, acquires assets for consideration other than cash from the company Any such arrangement by the company or its holding company shall be voidable at the instance of the company except in cases specified in section 192(3).

24 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 24 SectionOffencePenalty / Punishment 192(1) (b) The company acquires assets for consideration other than cash from such a director or person so connected. Unless prior approval of the company in general meeting by a resolution is accorded. Penalty as per section 450 192(2) If such a director/ person is a director of its holding company such approval is also required by a resolution in general meeting of the holding company. Notice for such resolution by the company or its holding company shall contain particulars of the arrangement with value of such assets duly calculated by a registered valuer

25 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 25 SectionOffencePenalty / Punishment 194 Violation of prohibition on forward dealing in securities of company by director or KMP. A director or key managerial personnel of a company shall not deal in forward dealing of securities of the company or its holding. Subsidiary or associates company. Further they are liable to surrender to the company the securities so acquired. The Company shall not register the securities in their name. If the securities are in dematerialized form, it shall inform the depository not to record acquisition. (Section 194(3). Director or key managerial personnel imprisonment for a term which may extend to two years or with fine not less than one lakh rupees which may extend to five lakh rupees or with both (section 194(2)}

26 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 26 SectionOffencePenalty / Punishment 195(1)Violation of the prohibition on insider trading of securities A person including any director or key managerial personnel not to deal in securities of the company having access to the non- public price- sensitive information as specified in section 195(1) (insider trading of securities) except communication required in the ordinary course of business or profession or employment or under any law. Any person contravening the provision of section 195 imprisonment for a term which may extend to five years or fine not less than five lakh rupees which may extend to twenty five crore rupees or three times the amount of profit made out inside trading, whichever is higher, or with both. (Section 195(2)). 202(2) No Payment by company of compensation for loss of office or as consideration for retirement from office or in connection with such loss or retirement to a director other than MD/WTD/ Manager under the circumstances specified in section 202(2) Penalty as per section 450

27 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 27 SectionOffencePenalty / Punishment 202(3) Proviso to 202(3) Any payment made to a managing or whole time director or manager as per section 202(1) exceeding the remuneration which he would have earned if he had been in office for the remainder of his term or for three years, whichever is shorter as specified in section 202(3) Such payment made to the director in the circumstances specified in the proviso to section 202(3) Penalty as per Section 450 Penalty as per Section 450 379A foreign Company is required to comply with the provisions of chapter XXII fails to do so. Company – fine not less than one lakh rupees which may extend to three lakh rupees; for continuing offence additional fine which may extend to fifty thousand rupees for everyday during which the default continues. Every Officer in default – imprisonment for a term which may extend to six months or fine not less than twenty five thousand rupees which may extend to five lakh rupees or with both (Section 392)

28 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 28 SectionOffencePenalty / Punishment 405Where the Central Government orders a company or class of companies to furnish information or statics relating to such company or where the central government calls for records or documents in the company’s possession or allow inspection of the company to be carried out, if the company falls to comply with such order or knowingly furnishes any information or statistics which is incorrect or incomplete in any material respect. Company – fine which may extend to twenty five thousand rupees. Every officer in default – imprisonment for a term which may extend to six months or fine not less than twenty- five thousand rupees which may extend to two lakh rupees or with both (Section 405(4)) 447FraudPerson found guilty of fraud – imprisonment for a term not less than 6 months (not less than 3 years where fraud involves public interest) but which may extend to 10 years and also fine not less than amount of fraud but which may extend to three times the amount involved.

29 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 29 SectionOffencePenalty / Punishment 448Except as otherwise provided in this Act, if a person makes a statement in any return, report, certificate, financial statement, prospectus, statement or other document required by or for the purposes of any of the provisions of the Act or rules made thereunder – (a) which is false in any material particulars, knowing it to be false. (b) which omits any material fact, knowing it to be material. Such a person – liable to action under section 447 449Save as otherwise provided in this Act, any person intentionally gives false evidence – (a)Upon any examination on oath or solemn affirmation autopsied under this act. or (a)In any affidavit, deposition or solemn affirmation, in or about the winding up of any company under this act or otherwise in or about any matter arising under this act. Such a person – imprisonment for a term not less than three years which may extend to seven years and with fine which may extend to ten lakh rupees.(section 449)

30 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 30 SectionOffencePenalty / Punishment 450Company or any officer of a company or any person contravening any provisions of the Act or the rules made thereunder or condition, limitation or restriction subject to which approval, sanction etc. have been accorded for which no penalty or punishment is provided. Company and every officer in default or such other person – fine which may extend to ten thousand rupees with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues. (Section 450) 451Repetition of default by a company or officer punishable with fine or imprisonment on subsequent occasions within a period of three years. Company and officer in default – where fine is provided twice the amount of fine and imprisonment as provided for such default. (Section 451)

31 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 31 SectionOffencePenalty / Punishment 452(1)Any Officer or employee of a company wrongfully obtains possession of any property/ cash of the company or wrongfully withholding the same or knowingly applies it for the purposes other than those expressed or directed in the articles and authorised by this Act. Complaint by the Company or of any member or any creditor of contributory of the company Such officer or employee of the company – fine not less than one lakh rupees which may extend to five lakh rupees (Section 452(1)) Court may also order such person to deliver up or refund within a specified time any such property or cash. (Section 452(2)) In default – such person to undergo imprisonment for a term which may extend to two years (Section 452(2)).

32 WORKSHOP ON COMPANIES ACT, 2013 WIRC - AHMEDABAD - 26.10.2013 32 SectionOffencePenalty / Punishment 453Any person or persons use the word “Limited “ or “Private Limited” or any contraction or limitation thereof as last word or words for his trade or business along with any name or title without getting duly incorporated with limited liability. Such person – fine not less than five hundred rupees which may extend to two thousand rupees for everyday for which that name or title has been used (Section 453)

33 WORKSHOP ON COMPANIES ACT, 2013


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