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  1. Best Consultancy by Experts
  2. Making the default Good
  3. Preparing of Petition & Documents
  4. Filing of Petition with NCLT or RD
  5. Getting the compounding order
  6. Filing Form INC-28


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Compounding of Offences under Company Act

A company is formed with some benefits as well as some of the legal duties. Companies some time comply with all the regulations and some time they fail to comply which leads to huge penalties. The provisions under Companies Act are formulated in a way to create a clear image. Few of the non-compliance are compoundable while few are not. If they are violated against either by the company or any officer, it leads to heavy duties or in some cases imprisonment. Compounding can be done for the offences which are penalized with fine. The Companies Act, 2013 provides for Compounding of Offence under Section 441.

What is an Offence?

Offence in layman’s language refers to an illegal act or crime. Offence means any act or omission made punishable by the law. The offences which are punishable with imprisonment only or with both imprisonment and fine cannot be compounded under the Act.

Only following types Offences can be compounded under Companies Act, 2013:

  1. Offence punishable with “fine only”- by NCLT/ RD /any officer authorised by Central Government, as the case may be.

  2. Offence punishable with “fine or imprisonment or both” or “fine or imprisonment” by Special Court.

Example of Offences which can be compounded:

  1. Section 56 (6) – Related to transfer and transmission of securities

  2. Section 99 – Related to default in convening Annual General Meeting

  3. Section 102(5) – Related to Explanatory Statement to notice

  4. Section 117(2) – failure in filing of MGT-14 for Resolutions and Agreements

  5. Section 203(5) – Failure in appointing Key Managerial Personnel

What is Compounding?

  1. As per the law states, Compounding is a matter of settlement via money. These definition practically explains Compounding as a “Settlement Mechanism”, a settlement where the lieu pays money of facing the prosecution. These penalties are ordered by the Central Government.

  2. Section 3 (38) of General Clauses Act, 1987 describes an offence is an act or omission which is considered to be punishable under an existing laws.

Why should a Company go for Compounding?

  1. No personal appearance for officer in default, as in case of prosecution for an offence in a criminal court;

  2. No further prosecution shall be initiated either by registrar or any authority after compounding;

  3. Summary proceeding, less time consuming;

  4. The Compounding fee cannot be more than the maximum fine levied under the relevant provision;

  5. No disqualification for Directors, since fees payable on compounding are not treated as penalty;


Procedure to Compound an Offence under Companies Act, 2013

  • 1

    Make the Default Good

    The first step is to review the offence made and make the default good by filing necessary Forms

  • 2

    Preparation of Application

    Once the Offence is made good, an application for compounding of an offence shall be made to the Registrar of Companies in Form GNL - 1.

  • 3

    Filing of Application with NCLT/RD

    The application is required to be filed with National Company law Tribunal (NCLT) or Regional Director (RD) and Registrar also forwards its report upon getting the same.

  • 4

    Hearing of Cases

    Upon the submission of case, the concerned authority hears both parties and pass compounding order by deciding the Quantum of Fine

  • 5

    Filing of INC-28

    Where any offence is compounded, an intimation is given to the Registrar within thirty days from the date on which the order is made in INC-28.

Documents Required for Compounding

  • Compounding Application in triplicate
  • Board resolution Authorising the Director to file the Application
  • Affidavit verifying the petition
  • Memorandum of appearance of Professional
  • Copies of Documents related to offence made good
  • Supporting documents reflecting the offence has been made good
  • How ComplyKart helps in this entire process


    We have a selective team of professional who are expert in their respective fields. We will provide you the best consulting on compounding of offence.

    Help in Preparation of Documents

    Our expert will prepare the necessary documents along with application based on the information that you have provided.

    Filing Documents with Ministry

    We will submit your application with NCLT or RD and appear on your behalf to make sure swift compounding


    We get through all your problems and resolve your queries with all Legal compliances till the completion of compounding

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