Notifications Ministry of Corporate Affairs
Decriminalisation of Minor Offences — Penalty Regime Instead of Prosecution
Companies (Amendment) Act 2019
- Issued
- 2019-07-31
- Effective from
- 2019-11-02
- Act
- Companies Act 2013
What it says
From prosecution to civil penalty
16 offences previously requiring prosecution before a Magistrate were converted to in-house adjudication by ROC/Registrar. These include: failure to file annual return (MGT-7), failure to file financial statements (AOC-4), failure to appoint auditor (ADT-1), failure to hold AGM (s.96/97), etc.
Adjudication by ROC
ROC issues a show-cause notice; if default is proved, ROC imposes a penalty under the relevant section. Maximum penalties for company and officers are specified in each section (e.g., s.92(5): company ₹50,000 to ₹5L; officer ₹50,000 to ₹5L).
Voluntary Disclosure Scheme implication
Companies in default can approach ROC under the Condonation of Delay Scheme (when operative) or pay the additional ROC fee under s.403 without triggering prosecution for procedural defaults.
Serious offences: prosecution retained
Offences involving fraud, falsification of records, furnishing false statements — prosecution under ss.447, 448 is retained and not decriminalised.
Affected forms and returns
- MGT-7
- AOC-4
- ADT-1
- DIR-3 KYC
- BEN-2
- DPT-3
The specific list of sections decriminalised and the current penalty quantum for each section — the Companies (Amendment) Act 2019 converted 16 offences; the Companies (Amendment) Act 2020 further decriminalised additional offences. Verify which sections were decriminalised in each amendment by checking the MCA notification for the operative date.
Primary source
Companies (Amendment) Act 2019 — issued by Ministry of Corporate Affairs under Companies Act 2013
View official notification ↗