| PART I |
| AMENDMENTS AIMED TO PROVIDE EASE OF DOING BUSINESS TO CORPORATES |
| Sections under Companies Act, 2013 | Proposed Amendments |
| Section 2(52) | Definition of ‘listed company’ | Clause 2 | A new proviso is proposed to be inserted, which allows the Central Government to exclude certain Companies based on listing of certain securities on recognized stock exchange, as may be provided by rules, in consultation with SEBI from the definition of listed companies. |
| Section 16 | Rectification of Name of Company | Clause 4 | - Section 16(1)(b) is proposed to be amended so as to reduce the time limit to comply with the direction of the Central Government for change of name of the Company in case of identical/resemblance to an existing trademark from a period of 6 months to 3 months.
- It is also proposed to substitute Section 16(3), whereby instead of imposing punishment for non-compliance the Central Government shall allot a new name to the Company.
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| Section 23 | Public Offer and Private Placement | Clause 5 | - Section 23(3) is proposed to be added wherein prescribed class of Public Companies shall be allowed to list certain class of securities on stock exchanges in permissible foreign jurisdictions.
- Further, it is also proposed to insert Section 23(4), whereby the Central Government may by notification exempt Companies covered under sub-section (3) from any of the provisions of Chapter III, Chapter IV, section 89, section 90 or section 127 of the Act.
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| Section 62 | Further Issue of Share Capital | Clause 11 | It is proposed to reduce timelines for applying for rights issues so as to speed up such issues under section 62. |
| Section 89 | Declaration in Respect of Beneficial Interest in any Share | Clause 18 | It is proposed to insert Section 89(11) whereby, the Central Government is empowered to exempt any class of persons from complying with any of the requirements of this section, except sub-section (10), either unconditionally or subject to such conditions as may be specified in the notification. |
| Section 117 | Resolutions and Agreements to be Filed | Clause 22 | The existing second proviso to Section 117(3)(g) is proposed to be substituted and in addition to a Banking Company, now it also seeks to enable the Central Government to exempt any class of NBFC’s registered under Chapter IIIB of Reserve Bank of India Act, 1934 and any class of Housing Finance Companies registered under the National Housing Bank Act, 1987 from filing of resolutions passed to grant loans or give guarantees or to provide security in respect of loans under Section 179(3)(f) of the Act in the ordinary course of their business. |
| Section 129A | Periodical financial Results | Clause 25 | It is proposed to insert a new section to empower the Central Government to prescribe a class of unlisted companies which shall prepare periodical financial results of the company, conduct audit or limited review thereof and file a copy of such results with the Registrar within 30 days from the end of the relevant period. |
| Section 135 | Corporate Social Responsibility | Clause 27 | - It is proposed to insert a new proviso to Section 135(5) to allow companies, which have spent an amount in excess of the requirement provided under the said sub-section, to set off such excess amount in the succeeding financial years in such manner as may be provided by rules.
- It is also proposed to insert Section 135(9), to ease the requirement of constitution of CSR Committee for Companies where the amount to be spent by a Company under sub-section (5) does not exceed Rs. 50 lakh.
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| Section 149 | Company to have Board of Directors | Clause 32 | A new proviso is proposed to be inserted in Section 149(9), to enable Companies which have no profits or inadequate profits to pay remuneration to independent directors in accordance with Schedule V of the Act. |
| Section 197 | Overall Maximum Managerial Remuneration and Managerial Remuneration in Case of Absence or Inadequacy of Profits | Clause 40 | Section 197(3) is proposed to be amended to provide for payment of remuneration to any non-executive director, including an independent director if a company fails to make profits or make inadequate profits in a financial year in accordance with Schedule V of the Act. |
| Section 284 | Promoters, Directors, etc., to Cooperate with Company Liquidator | Clause 46 | At present Section 284(2) provides for punishment for non-cooperation with the Company Liquidator. It is proposed to substitute the above provision to allow for Company Liquidator to make an application to the Tribunal for necessary directions in case any person does not assist or cooperate with the Company Liquidator. |
| Section 302 | Dissolution of Company by Tribunal | Clause 47 | A procedural change is proposed in Section 302(3) of the Act. It seeks to substitute the existing sub-section to provide that the Tribunal shall forward a copy of the order of dissolution to the Registrar, and direct the Company Liquidator to also forward such copy to the Registrar, who shall record in the register relating to the company a minute of the dissolution of the company. It is also proposed to omit sub-section (4) which provides for penalty on Company Liquidator in case of default. |
| Section 348 | Information as to Pending Liquidations | Clause 50 | It is proposed to substitute sub-section (6) to provide that if a Company Liquidator, who is an Insolvency Professional, is in default in complying with the provisions of the section, the default will be a contravention of the Insolvency and Bankruptcy Code, 2016, and the rules and regulations made thereunder. It is also proposed to remove the penalty provision stated under sub-section(7) |
| Section 356 | Powers of Tribunal to Declare Dissolution of Company Void | Clause 51 | A procedural change is proposed in Section 356(2) of the Act. It seeks to substitute the existing sub-section to provide that the Tribunal shall forward a copy of the order to the Registrar, and direct the Company Liquidator or the person on whose application such order was made to also file a certified copy of the order with the Registrar within 30 days of the order. |
| Chapter XXIA | Producer Companies | Clause 52 | A new chapter on Producer Companies is proposed to be introduced. It is proposed to be divided into XII Parts having Section 378A to 378ZU. It is intended to be based on similar lines as provided in the Companies Act, 1956. |
| Section 379 | Application of Act to Foreign Companies | Clause 53 | It is proposed to omit the proviso to sub-section (1) which empowers the Central Government to exempt any class of foreign companies from any of the provisions of sections 380 to 386, 392 and 393 by way of publishing an Order in Official Gazette. |
| Section 393A | Exemptions under Chapter XXII | Clause 55 | It is proposed to insert a new Section 393A to empower the Central Government to exempt any class of foreign companies or companies incorporated or to be incorporated outside India, from any of the provisions of Chapter XXII of the Act by notification to be laid before both Houses of Parliament. |
| Section 403 | Fee for Filing, etc. | Clause 56 | As per the existing third proviso to Section 403(1) the minimum additional fees which may be levied for default on two or more occasions in submitting, filing, registering or recording of prescribed documents, shall not be less than twice the additional fee as applicable, however it is proposed to eliminate such minimum fees and substitute the said proviso to provide that the default may be make good on payment of such higher additional fee as may be provided by rules. |
| Section 410 | Constitution of Appellate Tribunal | Clause 58 | It is proposed to remove the restriction provided on the number of Judicial and Technical members that the Central Government may appoint in the Appellate Tribunal. |
| Section 418A | Benches of Appellate Tribunal | Clause 59 | It is proposed to introduce a new section to provide for constitution of Benches of the Appellate Tribunal and related provisions. The Benches of the Appellate Tribunal shall hear appeals against any direction, decision or order referred to in section 53A of the Competition Act, 2002 and under section 61 of the Insolvency and Bankruptcy Code, 2016. |
| Section 435 | Establishment of Special Courts | Clause 60 | It is proposed to amend section 435(1) of the Act to provide that the offence under section 452 of the Act shall be excluded from the applicability of section 435 of the Act. Section 452 of the Act provides for punishment for wrongful withholding of Property. |
| Section 446B | Lesser penalties for certain companies | Clause 62 | It is proposed to amend Section 446B to provide for payment of lesser monetary penalty by a start-up company, Producer Company, One Person Company or small company on failure to comply with provisions of the Act which attract monetary penalties. At present, the provision is applicable only for One person Company and Small Company in respect of certain specified sections. |
| Section 452 | Punishment for Wrongful Withholding of Property | Clause 64 | It is proposed to insert a new proviso to sub-section (2) to provide that the imprisonment of officer or employee of the company specified under the said sub-section shall not be ordered in case wrongful possession or withholding of a dwelling unit is concerned and such officer or employee has not received certain statutory dues from the company. |
| Section 454 | Adjudication of Penalties | Clause 65 | It is proposed to insert a new proviso to sub-section (3) to provide that no monetary penalty shall be imposed when such default relates to non-compliance of sub-section (4) of section 92 or sub-section (1) or sub-section (2) of section 137 and has been rectified either prior to, or within 30 days of, the issue of the notice by the adjudicating officer. |
| Section 465 | Repeal of Certain Enactments and Savings | Clause 66 | The first proviso to sub-section (1) provides that the provisions of Part IXA of the Companies Act, 1956 shall be applicable to a producer company. However, since the bill proposes to insert a new Chapter with regard to Producer Companies, the above said provision seeks to be omitted. |
| PART II |
| DECRIMINALISATION OF OFFENCES In following sections of the Companies Act, 2013, penalty of imprisonment is proposed to be omitted |
- Section 8: Formation of Companies with Charitable Objects, etc.
The penalty of imprisonment of upto 3 years as stated in sub-section (11) on defaulting directors and officers of the company is proposed to be omitted. |
- Section 26: Matters to be stated in Prospectus
The penalty of imprisonment of upto 3 years as stated in sub-section (9) on every person who is knowingly a party to the issue of prospectus in contravention of provisions of the section is proposed to be omitted. |
- Section 40: Securities to be Dealt with in Stock Exchanges
In case of default in compliance requirement of Section 40, the penalty of imprisonment of upto 1 year as stated in sub-section (5) on every officer of the company who is in default is proposed to be omitted. |
- Section 48: Variation of Shareholders' Rights
It is proposed to omit sub-section (5) that provides for punishment for default in complying with the provisions of this section. |
- Section 59: Rectification of Register of Members
It is proposed to omit sub-section (5) that provides for punishment for default in complying with the order of the Tribunal under this section. |
- Section 68: Power of Company to Purchase its Own Securities
It is proposed to omit the penalty of imprisonment of upto 3 years as stated in sub-section (11) for default in compliance with the provisions of this section or regulations made by SEBI. |
| It is proposed to omit sub-section (11) which provides for penal provisions in case of any default in complying with the order of the Tribunal under the said section |
- Section 86: Punishment for Contravention of Chapter VI – Registration of Charges
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| Existing Penalty | Proposed Penalty |
| Company: Rs. 1 lakh to Rs. 10 lakh Every officer in default: Imprisonment: upto 6 months or Fine: Rs. 25,000 to Rs. 1 lakh, or with both. | Company: Rs. 5 lakh Every officer in default: Rs. 50,000 |
- Section 90: Register of significant beneficial owners in a company
Sub-section (10) provides for penalty in case of failure to make a declaration in accordance with sub-section (1) with respect to significant beneficial ownership. |
| Existing Penalty | Proposed Penalty |
| Person in default: Imprisonment: upto 1 year or Fine: Rs. 1 lakh to Rs. 10 lakh or with both and Continuing default: further fine which may extend to Rs. 1000 for every day after the first during which the failure continues | Person in default: Rs. 50,000 Continuing default: further penalty of Rs. 1000 for each day after the first during which such failure continues, subject to a maximum of Rs. 2 lakh. |
- Section 128: Books of Account, etc., to be kept by Company
It is proposed to omit the punishment of imprisonment of upto 1 year as stated in sub-section (6) in case of contravention of provisions of this section. |
- Section 134: Financial Statement, Board’s Report, etc.
Sub-section (8) provides for punishment for contravention of provisions of this section. |
| Existing Penalty | Proposed Penalty |
| Company: Rs. 50,000 to Rs. 25 lakh and Every officer in default: Imprisonment: upto 3 years or Fine: Rs. 50,000 to Rs. 5 lakh or with both. | Company: Rs. 3 lakh and Every officer in default: Rs. 50,000 |
- Section 135: Corporate Social Responsibility
Sub-section (7) provides for punishment in case the Company fails to spend the prescribed CSR amount as per sub-section (5) or fails to transfer the unspent amount to Specified Account or to a fund specified in Schedule VII as per sub-section (6) |
| Existing Penalty | Proposed Penalty |
| Company: Rs. 50,000 to Rs. 25 lakh and Every officer in default: Imprisonment: upto 3 years or Fine Rs. 50,000 to Rs. 5 lakh or with both | the company shall be liable to a penalty of twice the amount required to be transferred to the Fund specified in Schedule VII or the Unspent CSR Account, as the case may be, or Rs. 1 crore, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred to such Fund specified in Schedule VII, or the Unspent CSR Account, as the case may be, or Rs. 2 lakh, whichever is less. |
- Section 147: Punishment for Contravention of Chapter X – Audit and Auditors
It is proposed to omit the punishment of imprisonment of upto 1 year as stated in sub-section (1) for contravention of provisions of Section 139 to Section 146. Further, it is proposed to exclude Section 143 from the penal provisions stated in sub-section (2). |
- Section 167: Vacation of Office of Director
It is proposed to omit the punishment of imprisonment of upto 1 year as stated in sub-section (2) in case person functions as a director even when he knows that the office of director held by him has become vacant on account of any of the disqualifications specified in subsection (1) |
- Section 178: Nomination and Remuneration Committee and Stakeholders Relationship Committee
Sub-section (8) provides for punishment for contravention of provisions of Section 177 and this section. |
| Existing Penalty | Proposed Penalty |
| Company: Rs. 1 lakh to Rs. 5 lakh and Every officer in default: Imprisonment: upto 1 year or Fine: Rs. 25,000 to Rs. 1 lakh or with both | Company: Rs. 5 lakh and Every officer in default: Rs. 1 lakh |
- Section 184: Disclosure of Interest by Director
It is proposed to omit the punishment of imprisonment of upto 1 year as stated in sub-section (4) in case of default by director in disclosure of his interest as per provisions of sub-section (1) or subsection (2). Further, it is proposed to revise penalty on defaulting director to Rs. 1 lakh. |
- Section 187: Investments of Company to be Held in its Own Name
It is proposed to omit the punishment of imprisonment of upto 6 months on every officer in default as stated in sub-section (4) in case of contravention of provisions of this section. Further, it is proposed to revise the penalty on Company to Rs. 5 lakh and on every officer in default to Rs. 50,000 |
- Section 188: Related Party Transactions
Sub-section (5) provides for penalty on director or employee of the Company who had entered into or authorised the contract or arrangement in violation of the provisions of this section. |
| Existing Penalty | Proposed Penalty |
| (i) In case of listed company: Imprisonment: upto 1 year or Fine: Rs. 25,000 to Rs. 25 lakh or with both and (ii) In case of any other company: Rs. 25,000 to Rs. 5 lakh | (i) In case of listed company: Rs. 25 lakh and (ii) In case of any other company: Rs. 5 lakh |
- Section 232: Merger and Amalgamation of Companies
The present sub-section (8) provides for penalty on both the Transferor Company and Transferee Company for contravention of provisions of this section. It is proposed to sub-substitute (8) with the following provisions: If a company fails to comply with sub-section (5), the company and every officer of the company who is in default shall be liable to a penalty of Rs. 20000, and where the failure is a continuing one, with a further penalty of Rs. 1000 for each day after the first during which such failure continues, subject to a maximum of Rs. 3 lakh. |
- Section 242: Powers of Tribunal
It is proposed to omit the punishment of imprisonment of upto 6 months as stated in sub-section (8) on every officer in default for contravention of provisions of sub-section (5) regarding alteration in MOA and AOA which is inconsistent with the order of Tribunal, without its leave. |
- Section 243: Consequence of Termination or Modification of Certain Agreements
It is proposed to omit the punishment of imprisonment of upto 6 months as stated in sub-section (2) on any person who knowingly acts as a managing director or other director or manager of a company in contravention of clause (b) of sub-section (1) or sub-section (1A), and every other director of the company who is knowingly a party to such contravention. |
- Section 347: Disposal of Books and Papers of Company
It is proposed to omit the penalty of imprisonment of upto 6 months provided under sub-section (4) |
- Section 392: Punishment for Contravention of Chapter XXII – Companies Incorporated Outside India
It is proposed to omit the penalty of imprisonment of upto 6 months on every officer of the foreign company who is in default. |
- Section 405: Power of Central Government to Direct Companies to Furnish Information or Statistics
Sub-section (4) provides for punishment for non-compliance of order of Central Government for knowingly furnishing incorrect information or statistics. |
| Existing Penalty | Proposed Penalty |
| Company: Rs. 25,000 Every officer in default: Imprisonment: upto 6 months or Fine: Rs. 25,000 to Rs. 3 lakh or with both | Company and every officer in default: Rs. 20,000 Continuing default: further penalty of Rs.1000 for each day after the first during which such failure continues, subject to a maximum of Rs. 3 lakh |
- Section 441: Compounding of Certain Offences
Sub-section (5) provides for punishment in case of failure of any officer or employee of the Company to comply with any order made by the Tribunal or the Regional Director or any officer authorised by the Central Government under sub-section (4) |
| Existing Penalty | Proposed Penalty |
| Imprisonment: upto 6 months or Fine: upto Rs. 1 lakh, or with both | Maximum amount of fine for the offence proposed to be compounded under this section shall be twice the amount provided in the corresponding section in which punishment for such offence is provided |
| PART III |
| REDUCTION IN PENALTY In following provisions of the Companies Act, 2013, penalties are proposed to be reduced |
- Section 56: Transfer and Transmission of Securities
Sub-section (6) provides for penalty for default in compliance of provisions of Section 56 |
| Existing Penalty | Proposed Penalty |
| Company: Rs. 25,000 to Rs. 5,00,000 and Every Officer in default: Rs. 10,000 to Rs.1,00,000 | Company and Every Officer in default: Rs. 50,000 |
- Section 64: Notice to be Given to Registrar for Alteration of Share Capital
Sub-section (2) provides for penalty for default in compliance of provisions of Section 64 |
| Existing Penalty | Proposed Penalty |
| Company and officer in default: Rs. 1000 for each day during which such default continues, or Rs. 5 lakh whichever is less. | Company and officer in default: Rs. 500 for each day during which such default continues, subject to a maximum of Rs. 5 lakh in case of a company and Rs. 1 lakh in case of an officer who is in default. |
- Section 66: Reduction of Share Capital
It is proposed to omit sub-section (11) that provides for punishment for default in publication of order of confirmation of the reduction of share capital by the Tribunal as stated in sub-section (4). |
- Section 88: Register of Members, etc.
Sub-section (5) provides for penalty in case of failure to maintain prescribed statutory registers in accordance with the provisions of that section |
| Existing Penalty | Proposed Penalty |
| Company and every officer in default: Rs. 50,000 to Rs. 3 lakh; Continuing default: further fine which may extend to Rs. 1000 for every day, after the first during which the failure continues | Company: Rs. 3 lakh and Every officer in default: Rs. 50,000 |
- Section 89: Declaration in Respect of Beneficial Interest in any Share
Sub-section (5) provides for penalty in case of failure to make a declaration as required under this section |
| Existing Penalty | Proposed Penalty |
| Person who is in default: upto Rs. 50,000 Continuing default: further fine which may extend to Rs. 1000 for every day after the first during which the failure continues | Person who is in default: Rs. 50,000 Continuing default: further penalty of Rs. 200 for each day after the first during which such failure continues, subject to a maximum of Rs. 5 lakh |
- Section 89: Declaration in Respect of Beneficial Interest in any Share
Sub-section (7) provides for penalty in case of failure to file the return within prescribed time |
| Existing Penalty | Proposed Penalty |
| Company and every officer in default: Rs. 500 to Rs. 1000; Continuing default: further fine which may extend to Rs. 1000 for every day after the first during which the failure continues | Company and every officer in default: Rs. 1000 for each day during which such failure continues, subject to a maximum of Rs. 5 lakh in the case of a company and Rs. 2 lakh in case of an officer who is in default |
- Section 90: Register of significant beneficial owners in a company
Sub-section (11) provides for default in maintenance of register of significant beneficial owners or filing of return of significant beneficial owners and changes therein or to take necessary steps as provided in sub-section (4A) or denies inspection |
| Existing Penalty | Proposed Penalty |
| Company and every officer in default: Rs. 10 lakh to Rs. 50 lakh Continuing default: further fine which may extend to Rs. 1000 for every day after the first during which the failure continues | Company: Rs. 1 lakh Continuing default: further penalty of Rs. 500 for each day, after the first during which such failure continues, subject to a maximum of Rs. 5 lakh and Every officer in default: Rs. 25,000 Continuing default: further penalty of Rs. 200 for each day, after the first during which such failure continues, subject to a maximum of Rs. 1 lakh |
- Section 92: Annual Return
Sub-section (5) provides for failure to file Annual Return with the Registrar within prescribed time |
| Existing Penalty | Proposed Penalty |
| Company and every officer in default: Rs. 50,000 Continuing default: further penalty of Rs. 100 for each day during which such failure continues, subject to a maximum of Rs. 5 lakh | Company and every officer in default: Rs. 10,000 Continuing default: further penalty of Rs. 100 for each day during which such failure continues, subject to a maximum of Rs. 2 lakh in case of a company and Rs. 50,000 in case of an officer who is in default |
- Section 92: Annual Return
Sub-section (6) provides for penalty on a PCS for wrongly certifying the Annual Return |
| Existing Penalty | Proposed Penalty |
| Rs. 50,000 to Rs. 5 lakh | Rs. 2 lakh |
| Sub-section (5) provides for penalty in case if for the purpose of any meeting of a company, invitations to appoint as proxy a person or one of a number of persons specified in the invitations are issued at the company's expense to any member entitled to have a notice of the meeting sent to him and to vote thereat by proxy |
| Existing Penalty | Proposed Penalty |
| Every officer of the company who knowingly issues the invitations as aforesaid or willfully authorizes or permits their issue shall be punishable with fine which may extend to Rs. 1 lakh | Every officer of the company who issues the invitation as aforesaid or authorizes or permits their issue, shall be liable to a penalty of Rs. 50,000 |
- Section 117: Resolutions and Agreements to be Filed
Sub-section (2) provides for penalty in case of failure to file resolutions and agreements with the Registrar within specified time i.e. 30 days from the date of passing of resolution |
| Existing Penalty | Proposed Penalty |
| Company: Rs. 1 lakh Continuing default: further penalty of Rs.500 for each day after the first during which such failure continues subject to a maximum of Rs. 25 lakh and Every officer in default including liquidator of the company, if any: Rs. 50,000 Continuing default: further penalty of Rs.500 for each day after the first during which such failure continues, subject to a maximum of Rs. 5 lakh | Company: Rs. 10,000 Continuing default: further penalty of Rs. 100 for each day after the first during which such failure continues subject to a maximum of Rs. 2 lakh and Every officer in default including liquidator of the company, if any: Rs. 10,000 Continuing default: further penalty of Rs. 100 for each day after the first during which such failure continues, subject to a maximum of Rs. 50,000 |
- Section 124: Unpaid Dividend Account
Sub-section (7) provides for punishment in case of non-compliance with the requirements of this section |
| Existing Penalty | Proposed Penalty |
| Company: Rs. 5 lakh to Rs. 25 lakh and Every officer in default: Rs. 1 lakh to Rs. 5 lakh | Company: Rs. 1 lakh Continuing default: further penalty of Rs. 500 for each day after the first during which such failure continues, subject to a maximum of Rs. 10 lakh and Every officer in default: Rs. 25,000 Continuing default: further penalty of Rs. 100 for each day after the first during which such failure continues, subject to a maximum of Rs. 2 lakh |
- Section 137: Copy of Financial Statement to be Filed with Registrar
Sub-Section (3) provides for penalty in case of failure to file the copy of the financial statements within specified time |
| Existing Penalty | Proposed Penalty |
| Company: Rs. 1000 for every day during which the failure continues but which shall not be more than Rs. 10 lakh, and Other prescribed officers in default: Rs. 1 lakh and in case of continuing failure, with further penalty of Rs. 100 for each day after the first during which such failure continues, subject to a maximum of Rs. 5 lakh | Company: Rs. 10,000 Continuing default: further penalty of Rs. 100 for each day after the first during which such failure continues subject to a maximum of Rs. 2 lakh Other prescribed officers in default: Rs. 10,000 Continuing default: further penalty of Rs. 100 for each day after the first during which such failure continues, subject to a maximum of Rs. 50,000 |
- Section 140: Removal, Resignation of Auditor and Giving of Special Notice
Sub-Section (3) provides for penalty on the auditor in case he fails to file the notice of his resignation with the Registrar within the time specified i.e. 30 days from the date of resignation |
| Existing Penalty | Proposed Penalty |
| Rs. 50,000 or an amount equal to the remuneration of the auditor, whichever is less, and in case of continuing failure, with further penalty of Rs. 500 for each day after the first during which such failure continues, subject to a maximum of Rs. 5 lakh | Rs. 50,000 or an amount equal to the remuneration of the auditor, whichever is less, and in case of continuing failure, with further penalty of Rs. 500 for each day after the first during which such failure continues, subject to a maximum of Rs. 2 lakh |
- Section 143: Powers and Duties of Auditors and Auditing Standards
Sub-Section (15) provides for punishment on auditor, cost accountant or company secretary in practice in case of non-compliance of provisions of sub-section (12) with regard to reporting of fraud |
| Existing Penalty | Proposed Penalty |
| Rs. 1 lakh to Rs. 25 lakh | (a) in case of a listed company: Rs. 5 lakh and (b) in case of any other company: Rs. 1 lakh |
- Section 165: Number of Directorships
Sub-section (6) provides for penalty on a person who accepts an appointment as a director in contravention of sub-section (1) |
| Existing Penalty | Proposed Penalty |
| Rs. 5000 for each day after the first during which such contravention continues | Rs. 2000 for each day after the first during which such violation continues, subject to a maximum of Rs. 2 lakh |
- Section 172: Punishment for contravention of provisions of Chapter XI – Appointment and Qualification of Auditors
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| Existing Penalty | Proposed Penalty |
| Company and every officer in default: Rs. 50,000 to Rs. 5 lakh | Company and every officer in default: Rs. 50,000 Continuing default: further penalty of Rs. 500 for each day during which such failure continues, subject to a maximum of Rs. 3 lakh in case of a company and Rs. 1 lakh in case of an officer who is in default |
- Section 204: Secretarial Audit for Bigger Companies
Sub-section (4) provides for penalty on company or any officer of the company or the company secretary in practice who contravenes the provisions of this section |
| Existing Penalty | Proposed Penalty |
| Rs. 1 lakh to Rs. 5 lakh | Rs. 2 lakh |
- Section 247: Valuation by Registered Valuers
Sub-section (3) provides for punishment, if a valuer contravenes the provisions of this section or the rules made hereunder |
| Existing Penalty | Proposed Penalty |
| Rs. 25,000 to Rs. 1 lakh | Rs. 50,000 |
- Section 342: Prosecution of Delinquent Officers and Members of Company
It is proposed to omit sub-section (6) which provides for payment of fine by a person who fails or neglects to give assistance required by sub-section (5) |
- Section 450: Punishment Where No Specific Penalty or Punishment is Provided
The punishment under this section is levied on the company and every officer of the company who is in default or such other person who is in default |
| Existing Penalty | Proposed Penalty |
| Fine: Rs. 10,000 Continuing default: further fine which may extend to Rs. 1000 for every day after the first during which the contravention continues | Fine: Rs. 10,000, Continuing default: further penalty of Rs. 1000 for each day after the first during which the contravention continues, subject to a maximum of Rs. 2 lakh in case of a company and Rs. 50,000 in case of an officer who is in default or any other person |