Compliance management


Non-compliance & its consequences under Companies Act,2013_Chapter II

Chapter II - Incorporation of Company and matters incidental thereto read with Companies (Incorporation) Rules, 2014

  • Rule 5 - If One Person Company or any officer of such company contravenes the provisions of these rules, One Person Company or any officer of the One Person Company shall be punishable with fine which may extend to ten thousand rupees and with a further fine which may extend to one thousand rupees for every day after the first during which such contravention continues. 
  • Section 4(5)(ii) -  Where after reservation of name under clause (i) of section 4(5), it is found that name was applied by furnishing wrong or incorrect information, then,— (a) if the company has not been incorporated, the reserved name shall be cancelled and the person making application under sub-section (4) shall be liable to a penalty which may extend to one lakh rupees(b)  if the company has been incorporated, the Registrar may, after giving the company an opportunity of being heard— (i) either direct the company to change its name within a period of three months, after passing an ordinary resolution; (ii) take action for striking off the name of the company from the register of companies; or (iii) make a petition for winding up of the company.
  • Section 7(5) - If any person furnishes any false or incorrect particulars of any information or suppresses any material information, of which he is aware 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 7(6) -  Without prejudice to the provisions of sub-section (5) of section 7,  where, at any time after the incorporation of a company, it is proved that the company has been got incorporated by furnishing any false or incorrect information or representation or by suppressing any material fact or information in any of the documents or declaration filed or made for incorporating such company, or by any fraudulent action, the promoters, the persons named as the first directors of the company and the persons making declaration under clause (b) of subsection (1) of section 7 shall each be liable for action under section 447.
  • Section 7(7) - Without prejudice to the provisions of sub-section (6) of section 7, where a company has been got incorporated by furnishing any false or incorrect information or representation or by suppressing any material fact or information in any of the documents or declaration filed or made for incorporating such company or by any fraudulent action, the Tribunal may, on an application made to it, on being satisfied that the situation so warrants,— (a) pass such orders, as it may think fit, for regulation of the management of the company including changes, if any, in its memorandum and articles, in public interest or in the interest of the company and its members and creditors; or (b) direct that liability of the members shall be unlimited; or (c) direct removal of the name of the company from the register of companies; or (d)  pass an order for the winding up of the company; or (e) pass such other orders as it may deem fit:. Provided that before making any order under this sub-section,—(i) the company shall be given a reasonable opportunity of being heard in the matter; and (ii) the Tribunal shall take into consideration the transactions entered into by the company, including the obligations, if any, contracted or payment of any liability.
  • Section 8(11) - If a company makes any default in complying with any of the requirements laid down in this section, the company shall, without prejudice to any other action under the provisions of this section, be punishable with fine which shall not be less than ten lakh rupees but which may extend to one crore rupees and the directors and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than twenty-five thousand rupees but which may extend to twenty-five lakh rupees, or with both. Provided that when it is proved that the affairs of the company were conducted fraudulently, every officer in default shall be liable for action under section 447.
  • Section 11(2) - If any default is made in complying with the requirements of section 11, the company shall be liable to a penalty which may extend to five thousand rupees and every officer who is in default shall be punishable with fine which may extend to one thousand rupees for every day during which the default continues.
  • Section 11(3) - Where no declaration has been filed with the Registrar under clause (a) of sub section (1) of section 11 within a period of one hundred and eighty days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2) of section 11, initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.
  • Section 12(8) - If any default is made in complying with the requirements of section 12, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every day during which the default continues but not exceeding one lakh rupees.
  • Section 15(2) - If a company makes any default in complying with the provisions of sub-section (1) of section 15, the company and every officer who is in default shall be liable to a penalty of one thousand rupees for every copy of the memorandum or articles issued without such alteration.
  • Section 16(3) - If a company makes default in complying with any direction given under sub-section (1) of section 16, the company shall be punishable with fine of one thousand rupees for every day during which the default continues and every officer who is in default shall be punishable with fine which shall not be less than five thousand rupees but which may extend to one lakh rupees.
  • Section 17(2) - If a company makes any default in complying with the provisions of section 17, the company and every officer of the company who is in default shall be liable for each default, to a penalty of one thousand rupees for each day during which such default continues or one lakh rupees, whichever is less.
  • Rule 6(5) - If One Person Company or any officer of the One Person Company contravenes the provisions of these rules, One Person Company or any officer of the One Person Company shall be punishable with fine which may extend to ten thousand rupees and with a further fine which may extend to one thousand rupees for every day after the first during which such contravention continues.

 

 

 

Disclaimer: The contents of the blog is not legal advice and author of this blog will not be held responsible for any consequences by any person for use of any materials or contents lies or discussed in the blog.  


For further query, please contact:


CS Awadh Kishore Prasad (B.com, LLB & ACS)

E: csprasadak@gmail.com

 

 
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