CMA Intermediate · Corporate Accounting and Auditing · Secretarial Audit
Under Section 204 of the Companies Act, 2013, if a company contravenes the provisions of the section on secretarial audit, what is the consequence for the company and each officer in default?
The company and every officer in default are liable to a penalty of two lakh rupees. Section 204(4), as amended with effect from 21 December 2020, applies this penalty to the company, its officers in default and also a company secretary in practice who contravenes the section.
- AImprisonment up to one year
- BPenalty of two lakh rupeesCorrect
- CPenalty of five lakh rupees
- DOnly a written warning from the Registrar
Explanation
Section 204(4), as substituted with effect from 21-12-2020, provides that the company, every officer in default and the company secretary in practice who contravenes are liable to a penalty of two lakh rupees. The other figures and imprisonment are not in this sub-section.
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