1. Penal Provision Under the Companies Act, 1956
Presented By:
Manisha Chaudhary, Advocate
Partner, UKCA Law Chambers

2. It is open to the Company Law Board or the Regional Director to compound more than one offence under one charging Section at a time and from the date of such compounding, a similar offence committed subsequent to the date of compounding of the first offence, cannot be compounded within a period of three years from that date.
In the case of the company, the composition fee shall be paid from its funds. Directors/offices in default shall pay the composition fee from their personal funds.

3. In terms of Sub-Section (7) (a) of Section 621 A of the Companies Act, 1956, an offence which is punishable under the Companies Act with imprisonment or with fine or with both, shall be compoundable with the permission of the Court.
Accordingly, a question has arisen as to who will seek the permission of the Court?
It has been decided that in case the prosecution has been launched in the Court, it is the accused who will take permission of the Court before filing the application for composition of the offence under Section 621A(4)(a) of the Act.
One may, however, inform the Court after the offence is compounded as required by Section 621 (4)(d) of the Act.

4. List of Compoundable Offences
The following slides can be referred for at a glance overview of:
Offences compoundable by Company Law Board or Regional Director. These offences are punishable with fine only [Sub-section (1)];
Offences compoundable by Company Law Board or Regional Director with the permission of Court. These are offences punishable with imprisonment or with fine or both [Sub-section 7(a)];
Offences not compoundable under section 621 A – These are offences punishable with imprisonment only or with imprisonment and fine [Sub-section (7) (b)];
Compoundable offences punishable under section 629 A – For which punishment is not provided elsewhere in the Act.

5. Offences Compoundable by Company Law Board/Regional Directors
(offences punishable with fine only)
[Vide sub-section (1) of section 621A]
Section
Nature of Offence
Penalty
(w.e.f )
11(5)
Being a member of a company, association or partnership formed exceeding certain number.
Fine up to Rs. 10,000.
22(2)
Failure to comply with any direction given by Central Govt. to change the name of an existing company.
Fine up to Rs. 1000/- for every day during which default continues.
25(10)
Failure to remove name of Chambers of Commerce consequent upon revocation of licence.
Fine up to Rs. 5,000/- for every day during default continues.
39(2)
Failure to send copies of memorandum, Articles or agreement to members on demand .
Fine up to Rs. 500/-.
40(2)
Issues of altered copy of memorandum, articles, resolutions or agreements
Fine up to Rs. 100 for each copy.
(Continued…)

6. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
Failure to inform Registrar about conversion of private company.
Fine up to Rs. 5,000 per day.
44(3)
Failure to file the prospectus or statement in lieu of prospectus.
49(9)
Failure to comply with the provisions of sub-sections (1) to (8) relating to investments.
Fine up to Rs. 50,000.
56(3)
Issue of application form without salient features of prospectus or non-supply of copy of prospectus on demand.
58A(5)(a)
Failure by a company to make repayment in terms of sub-section (3)(c)/(4).
Fine not less than twice the amount of deposit not repaid.
58A(6)(a)(i)
Acceptance of deposits in excess of prescribed limits and contrary to rules.
Fine not less than the amount of deposits.
58A(6)(a)(ii)
Invitation of deposits in excess of prescribed limits and contrary to rules.
Fine up to Rs. 10,00,000 but not less than Rs. 50,000.
59(1)
Issue of prospectus without the copy thereof being filed with the Registrar.
60(5)
(Continued…)

7. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
69(4)
Failure to keep application moneys in Scheduled Bank.
Fine up to Rs. 50,000.
70(4)
Failure to file statement in lieu of prospectus.
Fine up to Rs. 10,000.
72(3)
Prohibitions as specified in the section are fulfilled.
73(2B)
Default in repayment of application moneys and interest.
73(3)
Failure to keep application money in Scheduled Bank.
75(4)
Failure to comply with the provisions of Section 75 relating to return of allotment.
Fine up to Rs. 50,000 per day.
75(4) Proviso
Contravention of proviso to sub-section
(1) (a).
76(5)
Failure to comply with the provision relating to commission and discount.
Fine up to Rs. 5,000.
77(4)
Contravening provisions on purchase by company or loans by company for purchase of its own or its holding company’s shares.
79(4)
Omitting to include in prospectus certain particulars relating to the issue of shares at a discount contained in sub-section (4).
Fine up to Rs. 500.
(Continued…)

8. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
80(6)
Non-compliance with the provisions of the section relating to issue to redeemable preference shares.
Fine up to Rs. 10,000.
80A(3)(a)
Failure to comply with the requirement relating to redemption of irredeemable preference shares.
Fine up to Rs. 10,000 per day.
84(3)
Fraudulently renewing or issuing of duplicate shares certificates by a company.
Fine up to Rs. 1,00,000.
89(3)
Non-compliance with the provisions of the sub-section relating to termination of disproportionately excessive voting rights in existing companies.
95(3)
Failure to give to the Registrar notice of consolidation, etc., of share capital in accordance with section 95(1).
Fine up to Rs. 500 per day.
97(3)
Failure to file with the Registrar notice of increase of capital or of members within thirty days of passing of resolution.
107(5)
Failing to forward to the Registrar a copy of order of the court in regard to variation of shareholders’ rights.
Fine up to Rs. 500.
(Continued…)

9. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
108-I(2)(a)
Failure to comply with section 108B.
Fine up to Rs. 50,000.
108-I(3)(a)
Failure to comply with section 108C.
108-I(4)(b)
Contravention of section 108B or 108D.
Fine up to Rs. 50,000 on company.
111(9)
Non-compliance with the order of Company Law Board relating to registration of transfer.
Fine up to Rs. 10,000 and Rs. 1,000 per day.
111(12)
Default in complying with the provisions of section 111.
Fine up to Rs. 500 per day.
111A
read with 111(9)
Failure to give effect to orders of Company Law Board.
Fine up to Rs. 10,000 and Rs. 1,000 per day after the first day.
111A read with 111(12)
Failure in complying with any of the provisions of section 111A.
Fine u to Rs. 500 per day.
113(2)
Failure to comply with section 113(1).
Fine up to Rs. 5,000 per day.
Failure to complete and having ready for delivery share of debenture certificate within two months of allotment, etc.
115(6)
Non-compliance with the requirements of section 115 relating to entries in the register in respect of share warrants.
(Continued…)

10. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
Copy of trust deed not made available for inspection
Fine up to Rs. 500 per day
118(2)
Failure to forward a copy of debenture trust deed to members or debenture holders within seven days at their request
Fine up to Rs. 500 and further fine up to Rs. 200 per day
127(2)
Failure to deliver to the Registrar for registration particulars of charges on company quarrying properly subject to charge
Fine up to Rs. 5,000
133(2)
Delivering debenture or certificate of debenture stock without endorsing on it certificates of registration
Fine up to Rs. 10,000
137(3)
Default in complying with the provisions of section 137 regarding appointment of receiver or manager
Fine up to Rs. 500
142(1)
Failure to file with the Registrar for registration particulars of any charge etc.
Fine up to Rs. 5,000 per day
142(2)
Not complying with any of the requirements of the Act as to registration with the Registrar of any charge, etc.
143(2)
Failure to make entry in register of charges
(Continued…)

11. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
144(3)
Refusing to allow inspection of copies of instruments creating charges and company’s register of charges
Fine up to Rs. 500 and further fine up to Rs. 200 per day
146(4)
Non-compliance with the requirements of section 146 in regard to registered office
Fine up to Rs. 500 per day
147(2)
Non-compliance with the provisions of section 147(1)(a) or in regard to painting or affixing its name and address of registered office outside office or place of business
147(3)
Non-compliance with the provisions of section 147(1)(b) or (c) in regard to engraving name on seal and mentioning name and registered office in business letters, etc.
Fine up to Rs. 5,000
147(4)
Misuse of seal, letter-head, etc by an Officer
148(2)
Non-compliance with the requirements of section 148(1) regarding publication of authorized as well as subscribed and paid-up capital
Fine up to Rs. 10,000
(Continued…)

12. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
Commencement of any new business in contravention of this sub-section
Fine up to Rs. 5,000 per day
149(6)
Commencement of business or exercising borrowing powers in contravention of section 149
150(2)
Failure to maintain register of members
Fine up to Rs. 500 per day
151(4)
Committing default in complying with the provisions of sub-section (1) to (3) relating to index or members
Fine up to Rs. 500
152(3)
Committing default in complying with the requirements of sub-sections (1) and (2) regarding register and index of debenture holders
Fine up to Rs. 500`
153B(3)
(a)
Failure to make a declaration by the trustee
Fine up to Rs. 5,000; further fine up to Rs. 100 per day
154(2)
Closing register of members or debenture holders otherwise than in compliance with the provisions of section 154(1)
157(3)
Failure to file with the Registrar notice of situation of office where foreign register is kept
Fine u to Rs. 500 per day
158(9)
Not transmitting to registered office in copies of entries in foreign register and not keeping at registered office in , duplicate of foreign register [Section 158(4)]
(Continued…)

13. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
162(1)
Non-compliance with the provisions of sections 150, 160 or 161 regarding annual return
Fine up to Rs. 500 per day
163(5)
Refusing inspection, making of any extract or sending any copy within specified time, of registers, returns, etc.
Fine up to Rs. 500 per day for each offence
165(9)
Non-compliance with the provisions relating to statutory meeting
Fine up to 5,000
168
Failing to hold annual general meeting in accordance with section 166 or to comply with any directions of Central Government under section 167(1)
Fine up to Rs. 50,000 and further fine up to Rs. 2,500 per day
176(2)
Omitting to state in notice of meeting that a member is entitled to appoint proxy and that proxy need not be a member
Fine up to Rs. 5,000
176(4)
Invitation to appoint proxy specified in the invitation issued at Company’s expense
Fine up to Rs. 10,000
187C(5)(a)
Failure to file declaration not holding beneficial interest in any share
Fine up to Rs. 1,000 per day
187C(5)(b)
Failure to file return by the company
Fine up to Rs. 100 per day
(Continued…)

14. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
188(8)
Non-compliance with the provisions of section 188 regarding circulation of members’ resolutions
Fine up to Rs. 50,000
192(5)
Failure to file with the Registrar certain resolutions or agreements in accordance with section 192(1)
Fine up to Rs. 200 per day
192(6)
Failure to annex copies of certain resolutions or agreements to articles or not forwarding to members on request copy of certain resolutions or agreements
Fine up to Rs. 100 for each copy in respect of which default is made
192A
Failure to comply with section 192A(1) to (4)
Fine up to Rs. 50,000 per day
193(6)
Non-compliance with the provisions of section 193 regarding minutes of proceedings of general meetings and of board and other meetings
Fine up to Rs. 500
196(3)
Refusing inspection of minutes book of general meetings or not furnishing to members on request a copy of minutes within specified time
Fine up to Rs. 5,000 each default
197(2)
Circulating or advertising proceedings of general meetings without including certain particulars
Fine up to Rs. 5,000 for each default
(Continued…)

15. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
Failure to transfer the amount of accumulated profits to unpaid dividend account and other provisions of section 205A
Fine up to Rs. 5,000 per day
218
Improper issue, circulation or publication of balance sheet or profit and loss account
Fine up to Rs. 5,000
219(3)
Failure to send to members, etc., copies of balance sheet, auditors report, etc.,
219(4)
Default in complying with certain demands for copies of balance sheet, etc., within seven days of such demand
220(3)
Failure to file with the Registrar copies of balance sheet, etc.
Fine up to Rs. 500 per day
223(4)
Non-compliance by certain companies with the provisions of section 223 regarding publication of half-yearly statement in the specified form
224(4)
Failure to give notice to the Central Government within seven days where no auditors are appointed at an annual general meeting
232
Failure of company to comply within the provisions of sections 225 to 231 in regard to auditors
(Continued…)

16. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
233
Failure of auditor to comply with section 227 and 229
Fine up to Rs. 10,000
233A
Failure to provide information to special auditor`
Fine up to Rs. 5,000
233B(11)
Failure to comply with the provisions of section 233B regarding audit of cost accounts by the company
Fine up to Rs. 50,000 against the company
234(4)
Failure to furnish information or explanation or production of books and papers
Fine up to Rs. 5,000 and further fine of Rs. 500 per day
250(10)
Otherwise contravening the restrictions imposed by the Central Government during investigation of ownership of shares and debentures
Fine up to 5,000
269(6)
Failure to vacate office where not approved by Central Government
Fine up to Rs. 5,000 per day against officer in default
269(10)
Order of CLB declaring that contravention or requirement of Schedule XIII has taken place
Fine up to Rs. 50,000 against the company and fine of Rs. 1,00,000 against the officers in default.
272
Acting as director without holding qualification shares
Fine up to Rs. 500 per day
(Continued…)

17. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
279
Acting as a director of more than 15 companies
Fine up to Rs. 50,000 in respect of each of the companies after the first 15 companies
283(2A)
Functioning as a director after vacation of office
Fine up to Rs. 5,00 per day
286(2)
Default in giving notice of Board meetings
Fine up to Rs. 1,000
293A(5)(a)
Political contribution made in contravention of the section
Fine up to three times of the contribution
294(8)
Neglecting or refusing to furnish information required by Central Government or to produce any books and papers, etc.
Fine up to Rs. 50,000 and further fine not less than Rs. 500 per day
299(4)
Failure to disclose interest in a contract by the Director
Fine up to Rs. 50,000
300(4)
Participation in Board meeting by interested directors
301(4)
Non-compliance with the provisions of sections 301(1), (2) and (3) in regard to register of contracts, companies and firms in which directors are interested
Fine up to Rs. 5,000 for each default
301(5)
Failure to maintain register of contracts
Fine up to Rs. 500 per day
(Continued…)

18. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
302(5)
Failure to keep register of directors or to file with the Registrar return of directors, managing director, manager and secretary
Fine up to Rs. 10,000
303(3)
Fine u to Rs. 500 per day
304(2)
Refusing inspection to any member of register kept under section 303
Fine up to Rs. 500
305(1)
Failure by a director to inform change of his particulars
Fine up to Rs. 5,000
307(7)
Failure to produce at annual general
307(8)
Failure to comply with the provisions of sections 307(1) and (2) in regard to register of directors shareholdings
Fine up to Rs. 50,000 and further fine up to Rs. 200 per day
320(3)
Failure to secure particulars regarding payment to directors stipulated in sub-section (1)
Fine up to Rs. 2,500
322(3)
Default in giving notice under this section
Fine up to Rs. 10,000 and damages
(Continued…)

19. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
Failure to maintain a register showing the names of companies under the same management and particulars of loans to them and failure to enter the particulars within three days of the making of the loan (up to only)
Fine up to Rs. 500 and further fine up to Rs. 50 per day
372(8)
Failure to maintain register of investments (up to only)
Fine up to Rs. 500 and further fine of Rs. 50 per day
372A(10)
Failure to comply with provisions of sub-section (5)
Fine up to Rs. 5,000 and further fine up to Rs. 500 per day.
374
Contravening section 372 (excluding sub-sections (6) and (7) or 373 in regard to investment made in shares and debentures of companies in the same group
Fine up to Rs. 50,000
383A(1A)
Failure to appoint whole-time secretary
Fine up to Rs. 500 per day
391(5)
Failing to annex to the copy of memorandum certified copy of court’s order sanctioning any compromise or arrangement with creditors and members
Fine up to Rs. 100 for each copy
393(4)
Failure to comply within the requirements of section 393 in regard to compromises or arrangements with creditors and members
(Continued…)

20. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
393(5)
Failure to give information by directors relating to compromise or arrangement with creditors or members
Fine up to Rs. 5,000
394(3)
Failure to file with the Registrar a certified copy of the order of the Court on application for sanctioning of a compromise of arrangement
Fine up to Rs. 500
395(4A)(b)
Issue of circular containing or recommending acceptance of offer for transfer of shares which has been registered
404(4)
Failure to file with the Registrar a certified copy of the altered memorandum of articles
Fine up to Rs. 50,000
416(3)(b)
Non-compliance with the requirements of section 416 in regard to contract by agents of company in which company is undisclosed principal
Fine up to Rs. 2,000
423
Non-compliance with the requirements of sections 421 and 422 in regard to receivers
445(1)
Non-compliance with the requirement of section 445(1)
Fine u to Rs. 1,000 per day against company and officer in default
454(5)
Default in submitting to the Official Liquidator a statement as to the affairs of the company
Fine up to Rs. 1,000 per day against company and officer in default
(Continued…)

21. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
481(3)
Default in forwarding to the Registrar a coy of the Court’s order dissolving the company
Fine up to Rs. 1,000 for each day of the default
485(2)
Default in giving notice of the resolution for voluntary winding
Fine up to Rs. 500 for each day of default
493(3)
Default in giving notice to the Registrar of the appointment of liquidator or liquidators
Fine up to Rs. 1,000 for each day of default
495(2)
Failure to summon a meeting of creditors in case of insolvency
Fine up to Rs. 5,000
496(2)
Failure to call a general meeting of the company at the end of the first year from the commencement of the winding up and at the end of each succeeding year
Fine up to Rs. 1,000 in respect of each failure
497(3)
Default in sending to the Registrar a copy of the accounts and return
497(7)
Failure to call a general meeting of the company as required by section 497
Fine up to Rs. 5,000 per day
500(6)
Default in complying with the provisions relating to the calling of meeting of creditors, etc.
Fine up to Rs. 10,000
501(2)
Default by company in giving notice to the Registrar of any resolution passed at a creditor’s meeting
(Continued…)

22. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
508(2)
Default by liquidator in calling a general meeting of the company
Fine up to Rs. 1,000
509(3)
Default by liquidator in sending to the Registrar a coy of the accounts and returns
Fine up to Rs. 500 for each day of default
509(7)
Failure of the liquidator to call a final general meeting of the company or creditors
513(3)
Appointment of a body corporate as liquidator
Fine up to Rs. 10,000
514
Giving, agreeing or offering to give, to any member or creditor of company any gratification
516(2)
Failure by liquidator to regarding for notice of his appointment in the prescribed form
Fine up to Rs. 500 for default
547(2)
Notification that a company is being wound up
Fine up to Rs. 5,000
551(5)
Default by liquidator to comply with requirements of the section
Rs. 5,000 for each day of default
559(2)
Default by any person, to file a certified copy of the order with the Registrar
Fine up to Rs. 50 for each day of default
598
Failure by any foreign company to comply with sections 591 to 597
Fine up to Rs. 10,000 and further fine up to Rs. 1,000 for each day of default
(Continued…)

23. Section Nature of Offence Penalty (w.e.f. 13.12.2000)
Penalty for offences, for which no punishment provided elsewhere
Fine up to Rs. 5,000 and further fine of Rs. 500 per day
630
Wrongful withholding of property of the company by an officer
Fine up to Rs. 10,000
631
Improper use of the words “limited” and “private limited”
Fine up to Rs. 500 per day

24. (offences punishable with imprisonment or with fine or with both)
Offences compoundable by Company Law Board/Regional Director with Court permission
(offences punishable with imprisonment or with fine or with both)
[vide section 621A (7)]
Section
Nature of Offence
Penalty
44(4)
Filing with the Registrar prospectus or statement by lieu of prospectus containing any untrue statement
Imprisonment up to two years or fine up to Rs. 50,000 or both
63(1)
Issuing a prospectus which includes any untrue statement 68
Fraudulently inducing persons to invest money
Imprisonment up to five years or fine up to Rs. 1,00,000 or both
70(5)
Delivery to the registrar statement in lieu of prospectus which includes any untrue statement
77A(10)
Default in complying with provisions relating to buy-back of securities and rules relating thereto
(Continued...)

25. Section Nature of Offence Penalty
84(3)
Fraudulently renewing or issuing of duplicate share certificates
Imprisonment up to six months or fine up to Rs. 1,00,000 or both to every officer in default
105
Concealing name of creditor, etc
Imprisonment up to three years or fine up to Rs. 50,000 or both to against officer in default
108-I(2)(b)
Failure to company with section 108B
108-I(3)(b)
Failure to comply with section 108C
192A(5)
Defacing or destroying postal ballot or declaration of identity of shareholder
Imprisonment up to 6 months
202(1)
Discharging functions of a director by an un-discharged insolvent
Imprisonment up to two years or with fine up to Rs. 50,000 or both
203(7)
Acting as a director in contravention of an order of the Court
Imprisonment up to two years or with fine up to Rs. 50,000 or both for each offence
(Continued...)

26. Section Nature of Offence Penalty
209(5) or (7)
Failure to keep proper books of account etc.
Imprisonment up to 6 months or fine up to Rs. 10,000 or both for each offence
210(5)
Failure to lay balance sheet and profit and loss account at the AGM
210(6)
Person charged with to comply with section 210
211(7) or (8)
Failure to prepare balance sheet and profit and loss account showing a true and fair view
212(9) or(10)
Failure to attach the accounts of subsidiary company, etc.
217(5) or (6)
Failure to take reasonable steps relating to Board’s report
Imprisonment up to 6 months or fine up to Rs. 20,000 or both for each offence
221(4)
Failure to disclose certain payments, to the company
Imprisonment up to six months or fine up to Rs. 50,000 or both
233B(11)
Failure to comply with the provisions of section 233B regarding audit of cost account
Imprisonment up to 3 years or fine up to Rs. 50,000 or both to every officer in default.
240(3)
Disobedience to the order of court directing production of books before inspector
Imprisonment up to six months or fine up to Rs. 20,000 or both and further fine up to Rs. 2,000 per day
250(9)
Exercise of right in respect of shares and debentures in violation of restrictions imposed by Company Law Board
(Continued...)

27. Section Nature of Offence Penalty
Failure to comply with section 292A
Imprisonment up to one year or fine up to Rs. 50,000 or both
295(4)
Loans to directors etc. without approval of Central Government
Fine up to Rs. 50,00 or imprisonment up to six months
308(3)
Failure to make disclosures of shareholdings by a director
Imprisonment up to 2 years or fine up to Rs. 50,000 or both
371(1)
Contravention of the provisions of sections 369, 370 or 370A in regard to loans to companies
Fine up to Rs. 50,000 or imprisonment up to six months
372A(9)
Default in complying with provision of section 372A [except sub-section (5)]
Imprisonment up to two years or fine up to Rs. 50,000
407(2)
Acting as a director in contravention of section 407(1)(b)
420
Failure to collect provident fund and payment of contribution to the trust
Imprisonment up to six months or fine up to Rs. 10,000 or both
454(5)
Default in complying with the provisions
Imprisonment up to two years or fine up to Rs. 1,000 or both
542(3)
Fraudulent conduct of business
Imprisonment up to two years or fine up to Rs. 50,000 or both
550(4)
Disposal of books and papers of company being wound up
Imprisonment up to 6 months or fine up to Rs. 50,000 or both
551(5)
Wilful default by liquidator in causing statement to be audited.
Imprisonment up to 6 months or fine up to Rs. 10,000 or both
606
Contravention of the provisions of sections 603, 604 and 605 relating to prospectus of foreign companies
Imprisonment up to six months or fine up to Rs. 50,000 or both
(Continued...)

28. Section Nature of Offence Penalty
Failure to file documents with the Registrar as directed by the Court
Imprisonment up to six months or fine or both
615(6)
Failure to furnish information of statistics, etc., required by the Central Government
Imprisonment up to three months or fine up to Rs. 10,000 or both
621A(6)
Failure to comply with order of Company Law Board or Regional Director for filing any document return etc.
Imprisonment up to 6 months or fine up to Rs. 50,000 or with both

29. Offences not compoundable
(offences punishable with imprisonment only or with
imprisonment and also with fine)
[Vide section 621(7) (b)]
Section
Nature of Offence
Penalty
58A(5)
(b)
Failure of repay deposit in accordance with the provisions of section 3(c)/(4)
Imprisonment up to 5 years and also fine
58A(6)
Invitation or acceptance of deposit in excess of the prescribed limits and contrary rules
58A(10)
Failure to comply with the order of CLB granting extension of time for making repayment of deposit
Imprisonment up to 3 years or fine not less than Rs. 500 per day
58AA(9)
Failure to comply with provisions of section 58AA
68A(1)
Application made for subscription of shares in a fictious name
Imprisonment up to 5 years
73(2B)
Failure to comply with the provisions of sub-section(2A) where the payment is not made within 6 months from the expiry of the eighth day
Fine up to Rs. 50,000 and also imprisonment up to one year
(Continued...)

30. Section Nature of Offence Penalty
(b)
Failure to comply with the provisions of section 80A regarding redemption of irredeemable preference shares by officers of the company in default
Imprisonment up to five years and fine
108-I(4)(a)
Contravention of section 108B or 108D
Imprisonment up to two years and also fine
116
Deceitfully personating as an owner of any shares or interest in a company
117C(5)
Default in complying with order of Company Law Board
Imprisonment up to three years and also find not less than Rs. 500 per day
153B(3)
False declaration by a trustee
207
Failure to distribute dividend within forty two days
Imprisonment up to 3 days and also fine up to Rs. 1,000 per day
209A(8)
Failure to produce books and papers, furnish information or explanation, etc.,
Fine not less than Rs. 50,000 and also imprisonment up to one year
269(10)
Contravention of the provisions of sub-section(9) or any direction given by the Company Law Board
Imprisonment up to 3 years and also fine up to 500 rupees per day
293A(5)
Political contribution made in contravention of the provisions of the section
Imprisonment up to 3 years and also fine
(Continued...)

31. Section Nature of Offence Penalty
628
False statement made in any return, balance sheet, prospectus etc.
Imprisonment up to 2 years and also fine
629
False evidence given on oath or in any affidavit
Imprisonment up to 7 years and also fine

32. Compoundable Offences punishable with fine only under section 629 A
There are several offences, for which no specific penalty is provided in the Act, and are thereby, punishable under section 629A. The penalty being by way of fine only, these offences are compoundable under section 621A. These provisions are summarized below:
Section
Nature of Offence
31(2A)
Failure to file a printed copy of articles of association including alteration which amounts to conversion of a public company into a private company with Registrar.
43A(8)
Failure to file the required certificate(s) alongwith annual return by a private company having share capital 55
Failure to put the date on the prospectus.
78(1) & (2)
Failure to transfer share premium received on issue of shares to share premium account, and to apply share premium account for other than specified purposes.
81(1)
Failure to offer shares to existing shareholders, etc., in event of further issue to share capital by the company. 83
Issue of shares by a company having a share capital, without giving appropriate distinctive numbers. 88
Issue of shares with disproportionate rights.
(Continued…)

33. Section Nature of Offence91
Failure to make calls on shares of the same class on a uniform basis.
102(2)
Failure to add the words ‘and reduced’ to name of company, consequent upon reduction of share capital under a Court order.
103(3)
Failure to publish notice of registration of order of the court, confirming the reduction of share capital
106
Alteration of rights of holders of different classes of share in contravention of the section
108(1)
Registration of transfer of shares etc. except on production of instrument of transfer duly stamped and executed.
110(2)
Registration of transfer of partly paid shares, unless company has given notice of application for transfer to the transferee.
117
Issue of debentures with voting rights at any meeting.
153
Enter of notice of any trust on the register of members or of debenture holders.
158(2)
Failure to keep foreign register of members or debenture holders, in case of issue of shares or debentures any State or country outside .
163(1)
Failure to keep register of members and annual return at the registered office, etc., in accordance with the section.
171(1)
Calling the general meeting of the company by giving a notice of less than 21 days in writing, except where consent under sub-section(2) has been given for calling the meeting at shorter notice.
(Continued…)

34. Section Nature of Offence
172(1) and (2)
Failure to give notice of general meeting to persons entitled to the notice in the specified manner.
173(2)
Failure to annex explanatory statement to the notice of meeting where required.
176(7)
Refusing members to inspect proxies lodged.
179(1)
Failure of the chairman to order poll, if demanded.
182
Prohibiting any member from exercising his voting rights on the ground that he has not held his share for any specified period, etc.
184(1)
Failure of the chairman to appoint two scrutinizers, where a poll is to be taken.
190(2)
Failure to give to members a notice of an intention to move a resolution requiring special notice.
196(1)(a)
Failure to keep the minute books of general meeting at registered office.
197A
Appointing or employing different categories of managerial personnel at the same time.
198(1)
Payment of remuneration to managerial personnel in excess of the specified limits.
200(1)
Payment of tax-free remuneration
204(1)
Appointing a firm or body corporate to office or place of profit under the company in contravention of the provisions of the section.
205(1)
Payment or declaration of dividend other wise than out of profits.
206(1)
Payment of dividend to persons other than registered shareholders, etc.
(Continued…)

35. Section Nature of Offence
208(3)
Payment of interest out of capital, without the approval of Central Government.
214(1)
Refusing inspection of books of account of a subsidiary to authorized representative of its holding company.
224(1)
Failure to give intimation of appointment as auditor.
224(8)
Fixation and payment of remuneration to auditor, except as provided in the section.
242(1)
Failure to provide assistance to Central Government in connection with prosecution launched by it on the basis of Inspector’s report.
252
Having number of directors below the minimum number specified.
257(1A)
Failure to inform the members of the company about candidature of a person for the office of directors.
259
Increasing The Number Of Directors, Without The Approval Of The Central Government.
263(1)
Failure to have the appointment for directors voted individually.
264(1) and (2)
Failure to file consent of the candidate for directorship with the company and the consent to act as director with the Registrar.
267
Appointment of ineligible persons as managing director.
274
Acting as director in spite of he being disqualified.
291
Exercise of any power by Board of directors, which is to be exercised by the company in general meeting.
292
Exercise of certain powers by Board of Directors, otherwise than at meetings and by way of resolution passed at meeting
(Continued…)

36. Section
Nature of Offence
293
Exercise of certain powers by the Board of Directors, without the consent of the company in general meeting.
297(1)
Entering into certain contracts without approval of the Central Government in case of a company having a paid-up share capital of rupees one crore or more.
309
Payment of remuneration to directors in excess of the specified limits.
314
Appointment of relative of directors, etc. to any office or place of profit under the company in contravention of the section.
316
Appointment of a person as managing director, if he is a managing director or manager in any other company except as provided in the section
318
Payment of compensation for loss of office to a director.
384
Appointment of firm or body corporate as Manager.
385(1)
Appointment of ineligible person as Manager.
386(1)
Appointment of a person as manager who is either manager or managing director of any other company, except as provided in the section.
387
Payment of remuneration to Manager in excess of 5 per cent of the net profits, without the approval of the Central Government.
569
Failure to authenticate statement of existing Companies falling under Part IX of the Act.
The above list does not contain offences relating to winding up of companies, under Part VII of the Companies Act.

37. PENALTIES
Under sub-section (6), any officer or employee of the company who fails to comply with the order of the Company Law Board or Regional Director under sub-section(5) shall be punishable with a fine which may extend up to rupees fifty thousand w.e.f (prior to , rupees five thousand) or with imprisonment up to a period of six months or both. The limit of fine has been enhanced by Companies (Amendment) Act, 2000.

38. SECRETARIAL POINTS TO BE NOTED FOR SEEKING COMPOUNDING OF AN OFFENCE
An offence can be compounded at any time, either before or after the institution of proceedings.
An application on plain paper for the compounding of an offence shall be made to the Registrar, in duplicate, who shall forward the same, together with his comments thereon to the CLB or the RD, as the case may be [sub-section (4)(a)].
No fee is payable to Registrar of Companies along with the aforesaid application.
The concerned Regional Bench of the CLB on scrutiny of the application, shall give notice of hearing to the company.
The company’s authorized representative will attend the hearing of the application and explain the reasons for committing the offence and pray for compounding of the offence. 
While compounding the offence, the CLB/RD may direct any officer of the company to file a return or other documents in question within such time period as may be specified in the order and non-compliance of the order shall be a punishable offence [sub-section (5) and (6)].  
The requisite payment, fixed after compounding the offence shall be made in accordance with the order of Regional Bench of the CLB or the RD, as the case may be. 

39. When an offence is compounded an intimation thereof shall be given to the Registrar by the delinquent company within 7 days of the order of compounding.
Where an offence, for which prosecution is pending in the court, is compounded, the Registrar shall send intimation in writing to the trial court about the composition of the offence and thereupon the accused person(s) shall be discharged by the court. 
The application should contain the following information: -
Date of incorporation of the company;
Status of the company such as whether it is a public limited company or private limited company or section 25 company;
Status of the applicant;
Capital structure of the company;
Address of the company’s registered office;
Nature of the offence and background of the alleged offence/violation/default;
Situation or circumstances leading to the alleged offence;
Pleading absence of mens rea.