General Non-Compliance Penalties

• Failure to comply with the provisions of the Companies Act can result in monetary fines, disqualification, or prosecution.
  
• The company and its officer in default (usually the director) are both held liable.
  
• General penalties may include a fine up to ₹10,000, with a further fine of ₹1,000 per day for continuing defaults.
  
• Some violations may lead to imprisonment of the officer, depending on the nature of the offence.
  
• Even unintentional or technical defaults must be corrected and reported to avoid escalating fines.
  

Annual Filing Defaults

• Not filing financial statements (Form AOC-4) or annual return (Form MGT-7A) attracts late fees of ₹100 per day per form.
  
• Delays beyond a certain threshold may result in notice of default or adjudication proceedings.
  
• Persistent failure may lead to the company being marked as “inactive” or subject to strike-off proceedings.
  
• The director may be disqualified from holding office in other companies if non-filing continues for three consecutive financial years.
  
• The Registrar of Companies (RoC) may issue notices or penalties under Sections 92 and 137 of the Act.
  

Director-Related Violations

• Not appointing a valid director or non-compliance with the resident director requirements may result in penalties.
  
• Defaulting directors may face fines ranging from ₹50,000 to ₹5,00,000 depending on the severity of the violation.
  
• False declarations, misuse of power, or concealment of facts may lead to criminal charges or imprisonment.
  
• Improper maintenance of statutory registers or failure to provide information can also attract fines.
  
• Mismanagement or fraud attracts stricter penalties under Sections 447 and 448.
  

Auditor-Related Non-Compliance

• Not appointing a statutory auditor or failing to file an auditor’s report can result in a fine for the company and the director.
  
• The minimum penalty is ₹25,000, which can increase depending on the duration and nature of the default.
  
• Misrepresentation or forgery in financial statements may attract penalties under fraud provisions, which include imprisonment up to 10 years and a fine up to three times the fraud amount.
  
• Auditors who collude or conceal facts may be debarred from practice under the Act and other professional regulations.
  

Business Operation Violations

• Engaging in restricted business activities, such as financial investments or NBFC operations, may result in action from both the MCA and the RBI.
  
• Using a misleading name or violating name reservation conditions can attract a fine of ₹1,000 per day, up to a maximum of ₹1,00,000.
  
• Conducting operations without maintaining books of account, a registered office, or board decisions leads to compliance violations.
  
• Improper handling of share transfers, nominee appointments, or director changes can cause regulatory action.
  
• Failure to comply with conversion requirements after exceeding thresholds can result in fines and mandatory conversion orders.