Norms of the Companies Act 2013

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Norms of the Companies Act 2013 – The Companies Act, 2013 has a number of norms and rules which its members have to abide completely. If there is any sort of non-compliance with regards to the same. There are heavy penalties or fine or imprisonment applicable. In order to guide you through the norms of the Companies Act 2013, there is provided a list of penalties, fine in accordance with the Companies Act, 2013.

List of penalties in accordance with the Companies Act 2013

  1. Section 15Alteration of Memorandum and articles to be noted in every copy –  There is a penalty of one thousand rupees. The penalty shall be if there is an alteration in the memorandum or articles of a company. One which is not noted in every copy of the memorandum of the articles. In accordance with this act, the company, as well as the officer in default, is responsible for the offenses.
  2. Section 4(5)-Reservation of the name-If after reservation of name, the information which has been provided is incorrect. Then there will be a penalty of Rs. 1 lakhs payable by the company. There is also a probability that there shall be cancellation of reserve name and the exposure to the penalty.
  3. Section 16Rectification of name of the company- When there is any sort of default in the registration of the name, then there is a penalty for the company with thousand rupees and in case of an officer the penalty is five thousand rupees which may extend to 1 lakh rupees.
  4. Section-17Copies of memorandum- If even after the request of the members the company has not provided them with memorandum or articles or any other document. Then the company, as well as an officer in default, have to pay the penalty of 1 thousand rupees for each day or 1 lakhs.

 

Other penalties

  1. Section 26Some Matters in the prospectus –There can be some sort of difference or hiding of matter in the prospectus. If that is the case, then for the Company, there is a penalty of 50000, which will extend to Rs. 3 lakhs. For others, there is imprisonment of 3 years as well as fine. In here, the company as well officer in default will be liable for a penalty.
  2. Section 39Allotment of securities by the company- There are two cases for this section to be applicable. One if the company has not returned the application money, which has received. Second if a company has not filed a return of allotment with the Registrar. In both the cases, the company, as well as the officer in default, will be liable for a penalty of Rs 1000 each.
  3. Section 56Transfer and transmission of securities- This section is applicable if the company makes any sort of default in the provision of transfer of shares. For the company, there will be a penalty of at least 25 thousand rupees. This may extend to 5 lakh rupees. For the officer in default, there will be a penalty at least 10 thousand, which can extend to 1 lakhs.

Hence it is advisable to take care of all the norms to avoid penalties.

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