• Shubham Mishra

Section 446 of the Companies Act, 2013: Application of Fines

Updated: Oct 14

#CompaniesAct

#Section446

#Fines

#SpecialCourt

#446A

#446B

#Offences

 

This section is covered under Chapter XXVIII of Companies Act, 2013 and it is effective from 12th September 2013.


Introduction

In this section, any fine imposed under this Act may be directed by the court to be applied in whole or in part to the payment of the proceedings' costs, or to the payment of a reward to the person whose information was used to bring the proceedings.


Section 446A

The court or the Special Court, while deciding the amount of fine or imprisonment under this Act, shall have due regard to the following factors, namely:—

(a) Size of the company;

(b) Nature of business carried on by the company;

(c) Injury to public interest;

(d) Nature of the default; and

(e) Repetition of the default.


Section 446B

If a one-person company or a small business fails to comply with the provisions of sub-section (5) of section 92, sub-section (2) of section 117, or sub-section (3) of section 137, the company and any officer in default of the company will be subject to a penalty equal to one-half of the penalty specified in such section. The Companies (Amendment) Ordinance, 2019, dated 12th January 2019 and effective from November 2, 2018, has been substituted.


Prior to the substitution, it read as follows: "Punishable with fine or imprisonment or fine and imprisonment, as the case may be, not exceeding one-half of the fine or imprisonment, as the case may be, of the minimum or maximum fine or imprisonment, as the case may be of the minimum or maximum fine or imprisonment or fine and imprisonment, as the case may be, specified in such sections”


Explanation.—In this section,

(a) "Producer Company" means a company as defined in clause (l) of Section 378A;

(b) "start-up company" means a private company incorporated under this Act or the Companies Act, 1956 and designated as such by the Central Government in the Department for Promotion of Industry and Internal Trade.

10 views0 comments