Log In Sign Up
e-File IT Returns For Your Clients. It’s FREE.

Any responsible firm must make sure that it complies with all the guidelines set in the Companies Act, 2013 during incorporation. Non-compliance my attract certain penalties. You can also read about the penalties post incorporation.

No Section No and Description Defaulting party Civil Liability Criminal Liability

(Imprisonment)

1) Sec 4- Company Name applied by furnishing wrong information & if Company is not incorporated Person Applying for the name Max: INR 1 lakh
2) Sec 7- Furnishing false/incorrect particulars or suppressing material information in relation to the registration of a company The person furnishing such information Min: Amount involved in the fraud

Max:3 times the amount involved &

Min: 6 Months

Max: 10 Years
*Fraud involving public interest:

Min: 3 years

3) Sec 8 – Failure to comply with provisions relating to the formation of companies with charitable objects

Affairs of the company conducted fraudulently.

Company

Directors /Officers in default

Every officer in default

Min: INR 10 Lakh

Max: INR 1 Crore
Min: INR 25 Thousand

Max: INR 25 Lakhs OR
Min: Amount involved in the fraud

Max: 3 times the amount involved &

Max: 3 years

OR

Both

Min: 6 Months

Max:10 Years
*Fraud involving public interest:

Min: 3 years

4) Sec 11- Failure to file a declaration by the director with the registrar that every subscriber has paid the value of the shares taken by him and Failure to file verification of registered office to the registrar within 30 days of incorporation Company

Officer

Max: INR 5 Thousand
INR 1 thousand for every day of default
5) Sec 12 – Default in complying with the provisions outlined as regards the registered office of the company Company and every officer in default INR 1 thousand for every day of default

Max: INR 1 Lakh

6) Sec 15 – Failure to note  alteration in every copy of the articles or memorandum as the case may be Company and every officer in default INR 1 thousand for every copy issued without alteration
7) Sec 16 – Failure to rectify the name of the company where in the opinion of  Central government the name is too identical/similar to an existing company name within 3 months after passing an ordinary resolution
When an application is made by a registered proprietor of trademark to the central government within 3 years of incorporation/registration/change of name of the company and the central government opines that the name is too identical/similar to an existing trademark and the company fails to rectify the name within 6 months after passing ordinary resolution
Company

Officer

INR 1 thousand for every day of default

Min: INR 5 thousand

Max: INR 1 Lakh

8) Sec 17- Failure to provide copies of Memorandum/Articles etc to members within 7 days of the request. Company and every officer in default INR 1 thousand for every day of default

OR

INR 1 Lakh

Whichever is less

9) Sec 42-Company making an offer or accepting monies in contravention of section pertaining to a private placement. Company

Promotor

Director

The amount involved in the fraud

OR

INR 2 Crores

Whichever is higher

10) Sec 16 – Failure to rectify the name of the company where in the opinion of  Central government the name is too identical/similar to an existing company name within 3 months after passing an ordinary resolution
When an application is made by a registered proprietor of trademark to the central government within 3 years of incorporation/registration/change of name of the company and the central government opines that the name is too identical/similar to an existing trademark and the company fails to rectify the name within 6 months after passing ordinary resolution
Company

Officer

INR 1 thousand for every day of default

Min: INR 5 thousand

Max: INR 1 Lakh

 

FREE software to e-file tax return of your clients
Signup Now for TaxCloud