CMA Intermediate · Corporate Accounting and Auditing · Secretarial Audit
A listed company and its company secretary in practice both contravene Section 204 by failing to comply with its requirements. As per the text of Section 204(4), what is the consequence for each person in default?
Under Section 204(4), the company, every officer of the company in default and the company secretary in practice in default are each liable to a penalty of two lakh rupees. The provision covers the practising professional as well and prescribes no imprisonment.
- ALiable to a penalty of two lakh rupeesCorrect
- BLiable to imprisonment of one year only
- CLiable to a penalty of five lakh rupees for the company and nothing for the practising secretary
- DLiable to disqualification for five years without any penalty
Explanation
Section 204(4) says that the company, every officer in default, or the company secretary in practice in default shall be liable to a penalty of two lakh rupees. It applies to each of them, including the practising secretary, and does not prescribe imprisonment.
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