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CSEET · Business Laws and Management · Elements of Company Law

Gopal Traders Ltd. altered its articles but issued 40 printed copies without noting the alteration. Under the Companies Act, 2013, what is the penalty on the company and each officer in default?

The penalty is Rs. 1,000 for every copy issued without the alteration. The Act requires every alteration to be noted in every copy, and the company and each officer in default are liable on a per-copy basis, not per day or as a lump sum.

  1. ARs. 1,000 for every copy issued without the alterationCorrect
  2. BRs. 1,000 in total for the whole default
  3. CRs. 1,000 per day until the copies are corrected
  4. DRs. 1 lakh in total irrespective of the number of copies

Explanation

Every alteration must be noted in every copy of the memorandum or articles. In default, the company and each officer in default are liable to a penalty of one thousand rupees for every copy issued without the alteration. So the penalty is calculated per copy, not as a lump sum or per day.

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