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CS Professional · Compliance Management, Audit and Due Diligence · Legal Framework Governing Company Secretaries

A company contravenes Section 26(1) by practising as Company Secretaries. Rohit, a director, knowingly took part in the contravention, and this is his first conviction. What fine does Section 26(2), as substituted in 2022, prescribe?

On first conviction, every director, manager, secretary or other officer who is knowingly a party to the contravention is punished with a fine of not less than Rs 2 lakh and up to Rs 10 lakh. The higher range applies only to subsequent convictions.

  1. AFine of not less than Rs 2 lakh but up to Rs 10 lakhCorrect
  2. BFine of not less than Rs 4 lakh but up to Rs 20 lakh
  3. CFine up to Rs 1,000 only
  4. DFine of not less than Rs 1 lakh but up to Rs 5 lakh

Explanation

Section 26(2) provides, on first conviction, a fine of not less than two lakh rupees extending to ten lakh rupees. The Rs 4 lakh to Rs 20 lakh range applies only on subsequent conviction, so using it for a first conviction is the key error.

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