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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Disclosures and Website Disclosures

Orchid Retail Pvt Ltd defaulted in complying with section 134 on financial statements and the Board's report. What consequence does the section prescribe?

For default in complying with section 134, the company is liable to a penalty of three lakh rupees and every officer in default to a penalty of fifty thousand rupees. The section does not provide for imprisonment or director disqualification.

  1. APenalty of three lakh rupees on the company and fifty thousand rupees on every officer in defaultCorrect
  2. BImprisonment of the managing director for one year
  3. CPenalty of fifty thousand rupees on the company only
  4. DDisqualification of all directors for five years

Explanation

Section 134(8) provides that on default the company is liable to a penalty of three lakh rupees and every officer in default to a penalty of fifty thousand rupees. It prescribes no imprisonment or disqualification.

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