Companies Act Section 446B — Lesser penalties for certain companies
CHAPTER XXVIII SPECIAL COURTS
Commercial / Corporate
Summary
This section provides reduced penalties for certain types of companies. It applies when a penalty is payable for not complying with any provision of this Act by a One Person Company, a small company, a start-up company, or a Producer Company, or by any of its officers in default, or any other person connected to such a company.
In such cases, the company, its officer in default, or any other person will only be liable to pay a penalty that is not more than half of the penalty normally specified for that non-compliance. However, this reduced penalty is subject to a maximum limit of two lakh rupees for the company itself, and one lakh rupees for an officer in default or any other person.
The explanation defines two terms for this section. Under clause (a), a "Producer Company" means a company as defined in clause (l) of section 378A. Under clause (b), a "start-up company" means a private company incorporated under this Act or under the Companies Act, 1956, and recognised as a start-up in accordance with a notification issued by the Central Government in the Department for Promotion of Industry and Internal Trade.
Official Text
Notwithstanding anything contained in this Act, if penalty is payable for non-compliance of any of the provisions of this Act by a One Person Company, small company, start-up company or Producer Company, or by any of its officer in default, or any other person in respect of such company, then such company, its officer in default or any other person, as the case may be, shall be liable to a penalty which shall not be more than one-half of the penalty specified in such provisions subject to a maximum of two lakh rupees in case of a company and one lakh rupees in case of an officer who is in default or any other person, as the case may be.
Explanation.—For the purposes of 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 under the Companies Act, 1956 (1 of 1956) and recognised as start-up in accordance with the notification issued by the Central Government in the Department for Promotion of Industry and Internal Trade.]