Section 441 of the Companies Act, 2013
Section 441 of the Companies Act, 2013 deals with the Compounding of Certain Offences under the Act.
📘 Section 441 – Compounding of Certain Offences
✅ What is “Compounding”?
Compounding of an offence means settling the offence by paying a fine, instead of undergoing prosecution or punishment. It avoids lengthy legal proceedings.
🔍 Key Provisions of Section 441:
Who Can Compound:
Tribunal (NCLT) can compound offences where the maximum amount of fine does not exceed ₹25 lakh.
Regional Director (or any officer authorized by the Central Government) can compound offences where the fine does not exceed ₹15 lakh.
If the fine is more than ₹25 lakh, only the NCLT can compound it.
Which Offences Can Be Compounded:
Only offences punishable with fine only, or with fine or imprisonment, can be compounded.
Application for Compounding:
The offender/company can apply to the Tribunal or Regional Director for compounding.
No Prosecution After Compounding:
Once an offence is compounded, no prosecution shall be initiated for that offence.
If prosecution is already initiated, and the offence is compounded, then intimation must be given to the court, and the person shall be discharged.
Repeat Offences:
If the same offence is committed again within three years of compounding, it cannot be compounded again.
Effect of Compounding:
Compounding has the effect of settling the matter legally, and the offender is not considered as convicted.
🧾 Example:
If a company fails to file its annual return within the due date (which is a compoundable offence), it can apply for compounding by paying a prescribed fine instead of facing prosecution.
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