Government prosecuted over 13,000 companies during last three years for violation of provisions of Companies Act, 1956

 

Mar 6, 2010 ICSI

Government on Thursday said it has prosecuted over 13,000 companies 

during the three years ending 2008-09 for

not following the provisions of the Companies Act.

“As many as 13,437 companies were prosecuted for
non-compliance of provisions of the Companies Act, 1956,
during the last three years–2006-07 to 2008-09,” Corporate
Affairs Minister Salman Khurshid told the Lok Sabha.

All locally incorporated companies are required to
follow the provisions of the Companies Act and regularly
file reports with the Registrar of Companies.

Violation of these norms invites penalty of different degrees,
depending on the gravity of offence. As many as 4,531 cases
were pending for prosecution, Khurshid said, adding,
“the process of filing prosecution in these cases has been initiated”.

There are more than eight lakh companies registered in
the country today. Khurshid said the Companies Bill 2009,
which is pending in the Lower House, proposes to increase
the penalty for non-compliance.

“Stringent provisions have been proposed under different
clauses in the Bill for non-compliance,” he said, adding
the new law significantly raises the penalty for wrongly
using suffix “Limited” or “Private Limited”.