From determining the competent authority to assessing whether your offence is compoundable — a complete view of the legal framework we navigate for you.
The authority for compounding depends on the maximum prescribed fine for the offence. The threshold of ₹25 lakhs, revised by the Companies (Amendment) Act 2017, determines jurisdiction.
Any director of the company, specifically authorised by the Board of Directors by way of a board resolution, may represent the company and file/sign the compounding application on its behalf.
Officers who are liable for prosecution under the relevant provision — including Managing Directors, Whole-Time Directors, Company Secretaries, and CFOs — may individually or jointly apply. A joint application by the company and officer is maintainable (NCLAT ruling).
Not all offences under the Companies Act, 2013 are compoundable. Section 441(6) draws a clear line based on the nature of punishment prescribed.
If the same offence was previously compounded and three years have not elapsed since the date of that compounding order, a fresh application for the same default is not maintainable. After the 3-year window, any subsequent commission is treated as a first offence.
Where any investigation under Sections 210–229 of the Companies Act, 2013 has been initiated or is pending, no offence covered under §441(1) shall be compounded. This is a significant departure from Section 621A of the Companies Act, 1956.
Offences where the prescribed punishment is imprisonment only, or imprisonment and fine together, are categorically non-compoundable under §441(6) — irrespective of any contrary provision under the Code of Criminal Procedure, 1973.
JurisTatva Advisors will assess your default, identify the competent authority, and chart the most efficient route to resolution.
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