Penalties for not adopting the Financial Statements
Following penalty provisions under the Companies Act shall be applicable, if the Financial Statement has not been adopted by the Company/Shareholder in the Annual General Meeting within Six Months from the end of the Financial Year:
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S. No. |
Particulars |
Penalty on Contravention |
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1. |
The provisions of Section 96 mandates on the companies to hold its AGM within 6 months form the end of its F.Y i.e., by 30th Sept, 2016 for the year ended on 31.03.2016. And Section 129 (2) requires the Board to lay, at every AGM, the Financial Statements before the members. Therefore, the Financial Statements shall require to be laid before the members within 6 Months from the end of F.Y. |
1. On the violation of section 96, the penalty provisions under section 99 will trigger which is as under: Company & Every Officer in Default: Punishable with Fine which may extend to Rs. 1 Lac and further for continuing default, fine which may extend to Rs. 5000/- for every day during which default continues. 2. On violation of Section 129(2) following penalty will trigger: MD, WTD in charge of Finance, CFO or any person Charged by the Board for compliance in this regard and in absence of Officer mentioned by the above All the Directors: a) Imprisonment: For a term which may extend to Rs. 1 yrs; or b) With fine of Rs. 50000/- which may extend to Rs. 5,00,000/-; or c) With Both. |
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2. |
Section 137: Copy of Financial Statement to be filed with RoC The provisions of sub-section 1 of Section 137 require the companies to file with RoC the adopted Financials within 30 Days from the date of AGM. Further, where the Financials are not adopted at the AGM, such un-adopted Financials shall require to be filed with RoC with 30 days. However, company shall be required to get the financial adopted in the adjourned AGM that required to be filed with RoC. |
1) Company: Punishable with fine of Rs. 1000/- for every day during which default continues which shall not be more than Rs. 10,00,000/- 2) MD and CFO and in absence of Officer mentioned any Directors Charged by the Board for compliance in this regard and in absence of these Officer mentioned All the Directors: a) Imprisonment : For the term which may extend to 6 months; or b) With fine of Rs. 1 Lac which may extend to Rs. 5 Lac; or c) With both. |
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3. |
Section 118 (10) mandates on the companies to follow the secretarial standard with respects to General Meeting |
1) On Company: Rs. 25,000/- and 2) On every officer in default: Rs. 5,000/- |
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