Adjudication, Compounding & Prosecution Under the Companies Act

Under the Companies (Adjudication of Penalties) Rules 2014, the notice gives 15 to 30 days to reply. The exact deadline is written in the notice. You can reply in writing and also request a personal hearing.

Yes, for some defaults. Under the proviso to Section 454(3), if the default is under Section 92(4) (Annual Return, MGT-7) or Section 137(1)/(2) (Financial Statements, AOC-4), and you rectify it within 30 days of the Show Cause Notice, no penalty is imposed.

Yes. Under Section 446B, One Person Companies, small companies, startups and producer companies pay no more than half the normal penalty, capped at ₹2 lakh for the company and ₹1 lakh for each officer in default.

Under Section 454(5), you can appeal to the Regional Director within 60 days of receiving the order. The Regional Director hears both sides and can confirm, modify or set aside the penalty.

Under Section 454(8), if the order is not complied with within 90 days, the company faces a fine of ₹25,000 to ₹5 lakh. Each officer in default faces imprisonment up to 6 months, or a fine of ₹25,000 to ₹1 lakh, or both.

Compounding lets a company or officer settle an offence by paying a compounding fee instead of facing prosecution. It applies to offences punishable with fine only, or with fine or imprisonment. The Regional Director compounds offences where the maximum fine is up to ₹25 lakh, and the NCLT handles offences above that.

No. Compounding only ends prosecution for that specific offence. It does not automatically remove director disqualification under Section 164 or other MCA restrictions. Also, the same offence cannot be compounded again within 3 years.

Yes. JurisTatva handles ROC adjudication, compounding and prosecution matters before all Registrars of Companies, Regional Directors and NCLT benches in India, including Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad and Ahmedabad.