Section 439, 440, 441, 446A, 446B, 447 and 458 of Companies Amendment Act 2017

Amendment of section 439 of Companies Act 2013

88. In section 439 of the principal Act, in sub-section (2), after the words "a shareholder", the words "or a member" shall be inserted.

Amendment of section 440 of Companies Act 2013

89. In section 440 of the principal Act, for the words "Court of Session", at both the places, the words "Court of Session or the Court of Metropolitan Magistrate or a Judicial Magistrate of the First Class, as the case may be" shall be substituted.

Amendment of section 441 of Companies Act 2013

90. In section 441 of the principal Act, in sub-section (1), for the words "with fine only", the words "not being an offence punishable with imprisonment only, or punishable with imprisonment and also with fine" shall be substituted.

Insertion of new section 446A. Factors for determining level of punishment

91. After section 446 of the principal Act, the following sections shall be inserted, namely:-
"446A. The court or the Special Court, while deciding the amount of fine or imprisonment under this Act, shall have due regard to the following factors, namely:-
(a) size of the company;
(b) nature of business carried on by the company;
(c) injury to public interest;
(d) nature of the default; and
(e) repetition of the default.

Section 446B Lesser penalties for One Person Companies or small companies.

446B. Notwithstanding anything contained in this Act, if a One Person Company or a small company fails to comply with the provisions of sub-section (5) of section 92, sub-section (2) of section 117 or sub-section (3) of section 137, such company and officer in default of such company shall be punishable with fine or imprisonment or fine and imprisonment, as the case may be, which shall not be more than one-half of the fine or imprisonment or fine and imprisonment, as the case may be, of the minimum or maximum fine or imprisonment or fine and imprisonment, as the case may be, specified in such sections.".

Amendment of section 447 of Companies Act 2013

92. In section 447 of the principal Act,-
(i) after the words "guilty of fraud", the words "involving an amount of at least ten lakh rupees or one per cent. of the turnover of the company, whichever is lower" shall be inserted;
(ii) after the proviso, the following proviso shall be inserted, namely:-
"Provided further that where the fraud involves an amount less than ten lakh rupees or one per cent. of the turnover of the company, whichever is lower, and does not involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to five years or with fine which may extend to twenty lakh rupees or with both.".

Amendment of section 458 of Companies Act 2013

93. In section 458 of the principal Act, in sub-section (1), the proviso shall be omitted.