Skip to content

CS Professional · Compliance Management, Audit and Due Diligence · Compliance Framework

Kaveri Engineering Ltd, being wound up, issued business letters without the winding-up statement, and the Company Liquidator wilfully permitted this. A company secretary advises on the penalty exposure under Section 344(2). Which advice is correct?

The penalty under Section 344(2) is a fine of not less than fifty thousand rupees, which may extend to three lakh rupees, on the company and on each officer, liquidator or receiver or manager who wilfully authorised or permitted the non-compliance.

  1. AFine of not less than fifty thousand rupees, extending to three lakh rupeesCorrect
  2. BFine up to fifty thousand rupees only
  3. CImprisonment up to six months with no fine
  4. DFine of not less than three lakh rupees, extending to five lakh rupees

Explanation

Section 344(2) provides a fine not less than fifty thousand rupees but which may extend to three lakh rupees. Option two reverses the minimum as a maximum. The others invent imprisonment or a higher range not in the section.

Did you get it right without looking?

One question tells you little. A timed set on Compliance Framework shows your real accuracy, how long you take and where you lose marks.

Practise Compliance FrameworkFree diagnostic mock

More Compliance Framework questions