Companies Act Section 172 — Penalty

CHAPTER XI APPOINTMENT AND QUALIFICATIONS OF DIRECTORS

Commercial / Corporate

Summary

If a company fails to follow any rule in this Chapter of the Act, and that rule does not already have its own specific penalty or punishment, then the company and every officer of the company who is responsible for the failure will have to pay a penalty of fifty thousand rupees.

If the failure continues after that, an additional penalty of five hundred rupees will be charged for each day the failure goes on. However, the total extra daily penalty is capped at a maximum of three lakh rupees for the company and one lakh rupees for the officer who is in default.

Official Text

If a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.]