Tag Archives: compounding

Serious Penal Consequence of late Annual Filing – landmine ahead

[The law stated in this post is effective from the 7th day of May 2018]

There is a perception that filing of financial statements and other documents with additional fee absolve the company from consequences under section 92, section 137 and conditional exemption given to certain companies by certain notifications issued by the Ministry of Corporate Affairs.

This is also a general view of the companies that any extension granted for the filing of the financial statements and other documents without additional fee grant immunity to the companies from its liabilities under mentioned provisions.

I beg to differ, conditionally.

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The Companies (Amendment) Act 2017 increased importance of compounding of offence manifold. Section 90 of the Companies (Amendment) Act, 2017 read with notification Notification S. O. 630(E) dated 9th February 2018 amended law related to compounding with effect from that date. However, provision of Section 441, as amended, of the Companies Act, 2013 gain momentum with notification Notification S.O. 1833(E) dated 7th May 2018. This notification notified amendment in Section 403. Most compounding application comes due to the late filing of forms constituting the violation of Section 403. Continue reading