Indian Companies Act 1956 provides a range of obligations to be discharged by every company registered under this act and also on the part of its Directors / Managers / Secretaries, etc. The law relating to penalties arising from non-compliance of various legalities is provided here in below. The basic knowledge of the Company Law is essential for every company director to avoid superfluous annoyance arising from lack of knowledge of the law.

1. Nature of Default – Section – 168 - Failing to hold AGM in accordance with section 166

Penalty - 50,000/- + 2,500 per day.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

2. Nature of Default – Section – 220(3)- Failure to file Annual Accounts with MCA

Penalty - Rs.500/- per day

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

3. Nature of Default – Section – 210(5) (6) - Default in laying Accounts at the AGM

Penalty - Imprisonment up to 6 months or fine up to 10,000 or both.

Persons to be held responsible for offence – Any person, not being a director of the company.

4. Nature of Default – Section – 218 - Improper issue, circulation or publication of Balance sheet or Profit and Loss Account

Penalty - Fine up to Rs 5,000/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

5. Nature of Default – Section – 219(3) - Failure to sent members Annual Accounts, Auditors Report atleast 21 days before meeting.

Penalty - Fine up to Rs.5,000/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

6. Nature of Default – Section - 219(4) - Default in complying with certain demands for copies of Annual Accounts within 7 days

Penalty - Fine up to Rs.5,000/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

7. Nature of Default – Section - 162(1) - Non compliance with the provisions of section 150, 160 or 161 with respect to Annual Return.

Penalty - Fine up to Rs.500/- Per day.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

8. Nature of Default – Failure to file with MCA certain Resolutions or Agreements entered in accordance with section 192 (1)

Penalty - Fine up to Rs.200/- Per day.

9. Nature of Default – Section - 217(5) (6) -Default in complying with the provisions of subsection (1) to (3) regarding Board of Director’s report.

Penalty - Imprisonment up to 6 months or fine up to Rs.20,000/-or with both.

10. Nature of Default – Section - 171(1)(2) - Contents & manner of service of notice in contravention of the provisions of the Act.

Penalty - Fine up to 5,000/- & further 500 for each day of default.

11. Nature of Default – Section - 193(6) – Non compliance with provisions of 193 regarding minutes of proceedings of General Meeting.

Penalty - Fine up to Rs.500/-

Persons to be held responsible for offence – The company and every officer of the company who is in default.

12. Nature of Default – Section -176(2) - Omitting to state in notice that, a member is entitled Appoint a proxy and that the proxies need not be a member.

Penalty - Fine up to Rs.5,000/-

Persons to be held responsible for offence – Every officer of the company who is in default.

13. Nature of Default – Section - 211(7) (8) - Failure to prepare Annual Accounts in the form & contents specified in the section.

Penalty - Imprisonment up to 6 months or Rs.10, 000 or both.

14. Nature of Default – Section - 142 - Non-Filing of registration of any charge created by the company, the payment or satisfaction of a debt in respect of which a charge has been registered under this part, or of the issue of debentures of a series.

Penalty - Fine upto Rs. 5,000/- for every day during which the default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

15. Nature of Default – Section – 143 -Willfully omission of any entry in the Registrar of charges.

Penalty - Fine upto Rs. 5,000/-

Persons to be held responsible for offence – Any officer of the company

16. Nature of Default – Section – 144 - Refusal for inspection of Register of Charge.

Penalty - Fine upto Rs. 500 which amy extend to Rs. 200 for every day during which the refusal continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

17. Nature of Default – Section – 146 - Failure to intimate Registrar about change of Registered Office.

Penalty - Fine upto Rs. 500/- for every day during which the default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

18. Nature of Default – Section – 147(1) (a) - Failure to paint or affix the name and the address of the company or to keep the same painted or affixed outside the office

Penalty - Fine upto Rs. 500/- for every day during which its name not so kept painted or affixed.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

19. Nature of Default – Section – 147(1) (b) & (c) - Failure to print its name on the seal or on letter heads, notices, hundies, promissory notes, cheques etc.

Penalty - Fine upto Rs. 5,000/-

Persons to be held responsible for offence – The company

20. Nature of Default – Section – 148 - Failure to publish Authorised, Subscribed and Paid – up Capital simultaneously.

Penalty - Fine upto Rs. 10,000/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

21. Nature of Default – Section – 150 - Failure to maintain Register of members

Penalty - Fine upto Rs. 500/- for every day during which the default continues

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

22. Nature of Default – Section – 151 - Failure to maintain Index of members.

Penalty - Fine upto Rs. 500/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

23. Nature of Default – Section – 152 - Failure to maintain Index of Debenture holders.

Penalty - Fine upto Rs. 500/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

24. Nature of Default – Section – 25 - Failure to renew the license of maintaining the words "Chambers of Commerce" in its name.

Penalty - Fine upto Rs. 5000/- for every day during which the default continues.

25. Nature of Default – Section – 44(3) - Failure to intimate the Registrar about any alteration in Article.

Penalty - Fine upto Rs. 5000/- for every day during which the default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

26. Nature of Default – Section – 44(3) - 44(4) - Untrue statement filed in any prospectus or statement in lieu of prospectus filed.

Penalty - Fine upto Rs. 50,000/- and imprisonment upto 2 years.

Persons to be held responsible for offence – Any person who authorized the filing of such prospectus.

27. Nature of Default – Section – 40 - Default in alteration is made in memorandum or articles in each copy after the alteration in MOA and AOA.

Penalty - Rs. 100/- for each copy so issued.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

28. Nature of Default – Section – 49 – Failure to held Investments of company in company’s own name.

Penalty - Fine upto Rs. 50,000/-

29. Nature of Default – Section – 153B(3)(a) - Non-declaration by trustee of shares and debentures held in trust.

Penalty - Fine upto Rs. 5,000/- which may extend to a further fine of Rs. 100 for every day during which the default continues.

Persons to be held responsible for offence – Trustee

30. Nature of Default – Section – 153B(3)(b) - False declaration by trustee.

Penalty - Imprisonment for a term which may extend to two years and also with fine.

Persons to be held responsible for offence – Trustee

31. Nature of Default – Section – 154 - If the register of members and debenture holders is closed without giving notice or giving a notice of less than 7 days.

Penalty - Fine upto Rs. 5,000/- for every day during which the register is so closed.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

32. Nature of Default – Section – 162(1) - Failure in complying with the provisions of section – 159, 160 and 161 (regarding filing of Annual Return)

Penalty - Fine upto Rs. 500/- for every day during which the default continues.

Persons to be held responsible for offence – Every officer of the company who is in default.

33. Nature of Default – Section – 163 - If any inspection or the making of any extract u/s 163 is not sent.

Penalty - Fine upto Rs. 500/- for every day during which the refusal or default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

34. Nature of Default – Section – 165 - If default is made in complying with section 165 (holding of Statutory Meeting and preparation of Statutory Report)

Penalty - Fine upto Rs. 5,000/-

Persons to be held responsible for offence – Every Director or other officer of the Company who is in default.

35. Nature of Default – Section – 168 - If default is made in holding an AGM (Sec 166) or in complying with any directions of the Central Government (Sec 167).

Penalty - Fine upto Rs. 50,000/- + Rs. 2,500 for every day after the first during which such default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

36. Nature of Default – Section – 176(2) - Default in giving the Proxy Form at the end of Notice for meeting.

Penalty - Fine upto Rs. 5,000/-

Persons to be held responsible for offence – Every officer of the company who is in default.

37. Nature of Default – Section – 188 - Default in complying with section 188 (regarding circulation of member’s resolution)

Penalty - Fine upto Rs. 50,000/-

Persons to be held responsible for offence – Every officer of the company who is in default.

38. Nature of Default – Section – 192A(5) - If a shareholder sends his assent or dissent under Sec-192A(2) in writing on a postal ballot and thereafter any person fraudulently defaces or destroys the ballot paper or declaration of identity of the shareholder.

Penalty - Imprisonment for a term which may extend to six months or with fine or both.

39. Nature of Default – Section – 192A(6) - Default in complying with sec- 192A(1) to 192A(4) (Regarding passing of resolutions by postal ballot)

Penalty - Fine upto Rs. 50,000/- in respect of each such default.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

40. Nature of Default – Section – 193(6) - Default in complying with the provisions of sec-193 in respect of any meeting (Minutes of proceedings of General Meeting and of Board and other meetings).

Penalty - Fine upto Rs. 5,000/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

41. Nature of Default – Section – 196(4) - If inspection of minute books is refused or any copy of minutes, if demanded, is not furnished.

Penalty - Fine upto Rs. 5,000/- in respect of each offence.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

42. Nature of Default – Section – 202 - If an undischarged insolvent discharges any of the functions of a Director.

Penalty - Imprisonment for a term which may extend to two years or with fine of upto Rs. 50,000/- or with both.

43. Nature of Default – Section – 203(7) - If any person acts in contravention of an order made under sec-203 (i.e. power of Court to restrain fraudulent persons from managing companies)

Penalty - Imprisonment for a term which may extend to 2 years or with fine upto Rs. 50,000/- or with both.

44. Nature of Default – Section – 58A(5) - Default in repayment of amount of deposit.

Penalty - Fine not less than twice the amount in relation to which the repayment of deposit has not been made and imprisonment for a term which may extend to 5 years.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

45. Nature of Default – Section – 58A(6) (a)(i) - If a company accepts any deposit in excess of the limits prescribed.

Penalty - Fine which shall not be less than an amount equal to the amount of deposit so accepted and imprisonment for a term which may extend to 5 years.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

46. Nature of Default – Section – 58A(6) (a)(ii) - If a company invites any deposit in excess of the limits prescribed.

Penalty - Fine which may extend to Rs. 10,00,000/- but shall not be less than Rs. 50,000/- and imprisonment for a term which may extend to 5 years.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

47. Nature of Default – Section – 58A(10) - Failure in compliance with the order of Company Law Board passed under Sec-58A(9) regarding repayment of deposit.

Penalty - Imprisonment which may extend to 3 years and fine of not less than Rs. 500 for every day during which such non-compliance continues.

Persons to be held responsible for offence – Whoever fails to comply with the order.

48. Nature of Default – Section – 58AA (9) - Failure in compliance with the order of Company Law Board passed under Sec-58AA(9).

Penalty - Imprisonment which may extend to 3 years and fine of not less than Rs. 500 for every day during which such non-compliance continues.

Persons to be held responsible for offence – Whoever fails to comply with the order.

49. Nature of Default – Section – 59 - If any prospectus is issued in contravention of sec- 57 & 58.

Penalty - Fine which may extend to Rs. 50,000

Persons to be held responsible for offence – Any person who is knowingly a party of the issue.

50. Nature of Default – Section – 60(5) - If a prospectus is issued without a copy being delivered to the Registrar or without the copy so delivered having endorsed thereon and attached thereto the required consent or documents.

Penalty - Fine which may extend to Rs. 50,000/-

Persons to be held responsible for offence – The Company and every person who is knowingly the party of the issue.

51. Nature of Default – Section – 63 - Mis-statement or untrue statement in prospectus.

Penalty - Imprisonment for a term which may extend to 2 years or wit fine which may extend to Rs. 50,000/- or with both.

Persons to be held responsible for offence – Every person who authorized the issue of prospectus.

52. Nature of Default – Section – 68 - Any person who knowingly or recklessly makes any statement, promise or forecast which is false, deceptive or misleading.

Penalty - Imprisonment for a term which may extend to 5 years or with fine which may extend to Rs. 1,00,000/-or with both.

Persons to be held responsible for offence – Any person.

53. Nature of Default – Section – 68A - Any person who makes application in a fictitious name for acquiring shares, etc.

Penalty - Imprisonment for a term which may extend to 5 years.

Persons to be held responsible for offence – Any person.

54. Nature of Default – Section – 69(4) - Contravention of the provisions of sec-69(4) regarding deposit and refund of application money received.

Penalty - Fine which may extend to Rs. 50,000/-

Persons to be held responsible for offence – Every Promoter, Director or other person who knowingly responsible for such contravention.

55. Nature of Default – Section – 70(5) - Where a statement in lieu of prospectus delivered to the Registrar includes any untrue statement.

Penalty - Imprisonment for a term which may extend to 2 years or with fine which may extend to Rs. 50,000/- or with both.

Persons to be held responsible for offence – Every person who authorized the delivery of statement in lieu of prospectus for registration.

56. Nature of Default – Section – 73(2B) - If default is made in complying with the provisions of Sec -73(2A) which states that where permission has been granted by the Recognised Stock Exchange for dealing in shares or debentures in such stock exchange and the moneys received from the applicants for shares or debentures are in excess of the aggregate of the application moneys relating to the shares or debentures in respect of which allotments have been made, the company shall repay the moneys to the extent of such excess forthwith without interest, and if such money is not repaid within eight days, from the days company liable to pay it.

Penalty - Fine which may extend to Rs. 50,000 and where repayment is not made within 6 months from the expiry of eighth day, also with imprisonment which may extend to one year.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

57. Nature of Default – Section – 73(3) - Failure in keeping the money received (for allotment of shares and debentures) in a separate bank account maintained with a schedule bank.

Penalty - Fine which may extend to Rs. 50,000/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

58. Nature of Default – Section – 79(4) - Every prospectus relating to the issue of the shares shall contain particulars of the discount allowed on the issue of the shares or of so much of that discount as has not been written off at the date of the issue of the prospectus.

Penalty - Fine which may extend to Rs. 500/-.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

59. Nature of Default – Section – 207 -Failure to distribute dividends within thirty days.

Penalty - Simple imprisonment for a term which may extend to three years and shall also be liable to fine of Rs. 1000/- for every day during which the default continues and the company shall also be liable to pay simple interest at the rate of 18% p.a. during the period for which such default continues.

Persons to be held responsible for offence – Every Director of the Company, if he is knowingly a party to the default.

60. Nature of Default – Section – 218 - Improper issue, circulation or publication of Balance Sheet or Profit and Loss A/c.

Penalty - Fine which may extend to Rs. 5000/-

Persons to be held responsible for offence – The Company and every officer of the company, who is in default.

61. Nature of Default – Section – 232 - Default in complying with the provisions of Sec-225 to 231 (regarding resolutions for appointing or removing auditors, qualifications and disqualifications of auditors, powers and duties of auditors, audit of accounts of branch office of company, signature of audit report, reading and inspections of auditor’s report and right of auditor to attend general meeting.)

Penalty - Fine which may extend to Rs. 5000/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

62. Nature of Default – Section – 233 - Non-compliance by auditors with the provisions of Sec 227 and 229 (Sec-227, duties of auditors and Sec – 229 regarding signature of audit report)

Penalty - Fine which may extend to Rs. 10,000/-

Persons to be held responsible for offence – The Auditor concerned, and the person, if any, other than the auditor who signs the report or signs or authenticates the document.

63. Nature of Default – Section – 272 - If, after the expiry of the said period of two months, any person acts as a director of the company when he does not hold the qualification shares ( as referred in sec- 270)

Penalty - Fine which may extend to Rs. 500 for every day between such expiry and the last day on which he acted as a director.

Persons to be held responsible for offence – Any person who acts as a Director.

64. Nature of Default – Section – 279 - If any person who holds office, or acts, as a Director of more than 15 companies in contravention of the provisions.

Penalty - Fine which may extend to Rs. 50,000/- in respect of each of those companies after the first 20.

Persons to be held responsible for offence – Any person who holds office or acts as a Director.

65. Nature of Default – Section – 302(5) - Failure in disclosing to members of Director’s interest in contract appointing manager, managing director.

Penalty - Fine which may extend to Rs. 10,000.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

66. Nature of Default – Section – 303(3) - Failure in maintaining the Register of director.

Penalty - Fine which may extend to Rs. 500/- for every day during which the default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

67. Nature of Default – Section – 304(2) - Refusal for inspection of Register of director.

Penalty - Fine which may extend to Rs. 500/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

68. Nature of Default – Section – 308 - Duty of directors and persons deemed to be directors to make disclosure of shareholdings.

Penalty - Imprisonment for a term which may extend to 2 years, or with fine which may extend to Rs. 50,000 or with both.

Persons to be held responsible for offence – Any person who fails to comply.

69. Nature of Default – Section – 322 -If any director, manager or proposer makes default in adding a statement that the liability of the person holding the office will be unlimited.

Penalty - Fine which may extend to Rs. 10,000/- and shall also be liable for any damage which the person so appointed may sustain from the default but the liability of the person appointed shall not be affected by the default.

Persons to be held responsible for offence – Any director, manager or proposer.

70. Nature of Default – Section – 371 - Contravention to the provisions of sec – 370 or 370A including in particular any person to whom the loan is made, or in whose interest the guarantee is given or the security is provided.

Penalty - Fine which may extend to Rs. 50,000/- or with simple imprisonment for a term which may extend to 6 months.

Persons to be held responsible for offence – Every person who is a party to any contravention.

71. Nature of Default – Section – 374 - Contravention with the provisions of Sec – 372 or 373. (Sec-372 regarding purchase by company of shares, etc. of other companies and Sec – 373 regarding Investments made before commencement of Act)

Penalty - Fine which may extend to Rs. 50,000/-

Persons to be held responsible for offence – Every officer of the company who is in default.

72. Nature of Default – Section – 383A - Failure in having a whole time secretary.

Penalty - Fine which may extend to Rs. 500/- for every day during which the default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

73. Nature of Default – Section – 404(4) - Failure in filing copy of every order altering, or giving leave to alter, a company’s memorandum or articles, within 30 days.

Penalty - Fine which may extend to Rs. 50,000/-.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

74. Nature of Default – Section – 420 - Contravention of the provisions of Section – 417, 418 and 419. (Regarding provident fund of employees)

Penalty - Imprisonment for a term which may extend to 6 months or with fine which may extend to Rs. 10,000/-.

Persons to be held responsible for offence – Any officer of the company, or any such trustee of a provident fund.

75. Nature of Default – Section – 423 - Non compliance with sections 421 and 422. (Regarding filing of accounts of receivers and Invoices, etc. to refer to receiver where there is one)

Penalty - Fine which may extend to Rs. 2000/-

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

76. Nature of Default – Section – 485 - Failure in publication of resolution of winding up in the official gazette and also in newspaper circulating in the district.

Penalty - Fine which may extend to Rs. 500/- for every day during which the default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.

77. Nature of Default – Section – 493 - Failure in giving the notice of appointment of liquidator to the registrar.

Penalty - Fine which may extend to Rs. 1000/- for every day during which the default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default. (Including every liquidator or continuing liquidator)

78. Nature of Default – Section – 496 - Duty of liquidator to call general meeting at end of each year, in the event of the winding up continuing for more than 1 year.

Penalty - Fine which may extend to Rs. 1000/-

Persons to be held responsible for offence – Liquidator

79. Nature of Default – Section – 497 - Failure in sending a copy of account and return to the registrar and official liquidator.

Penalty - Fine which may extend to Rs. 500- for every day during which the default continues.

Persons to be held responsible for offence – Liquidator

80. Nature of Default – Section – 501 - Failure in submitting with the registrar copy of resolution passed at a creditor’s meeting.

Penalty - Fine which may extend to Rs. 500/- for every day during which the default continues.

Persons to be held responsible for offence – The Company and every officer of the company who is in default.........................

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