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CS Executive · Company Law and Practice · Memorandum and Articles of Association and its Alteration

Anand Engineering Ltd altered its articles and registered the alteration. It then issued 200 printed copies of the articles without incorporating the alteration. What is the consequence under the Companies Act, 2013?

The company and every officer in default are liable to a penalty of one thousand rupees for each copy of the articles issued without the alteration. Section 15 requires every alteration to be noted in every copy, so registration alone does not avoid the penalty.

  1. APenalty of one thousand rupees for every copy issued without the alteration, on the company and every officer in defaultCorrect
  2. BPenalty of one lakh rupees in total, on the company only
  3. CCancellation of the alteration
  4. DNo consequence because the alteration is already registered

Explanation

Section 15(1) requires every alteration to be noted in every copy of the articles. Under Section 15(2), default makes the company and each officer in default liable to a penalty of one thousand rupees for every copy issued without the alteration. Here the exposure is per copy.

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