Section 446B of CA 2013 : Section 446B: Lesser Penalties For One Person Companies Or Small Companies

Explanation using Example

Imagine a One Person Company (OPC) called "QuickTech OPC Pvt. Ltd." that specializes in providing tech solutions. The company inadvertently failed to file its annual return with the Registrar of Companies (ROC) within the prescribed time frame, which is a violation under the Companies Act, 2013. Normally, a company would face a hefty penalty for such non-compliance.

However, under Section 446B of the Companies Act, 2013, since QuickTech is an OPC and qualifies as a small company, it is eligible for a reduced penalty. Instead of the standard penalty amount, QuickTech OPC Pvt. Ltd. will be subject to a penalty that is not more than one-half of the specified penalty for the offense, with a maximum cap of two lakh rupees for the company.

This provision helps small businesses like QuickTech OPC Pvt. Ltd. by reducing the financial burden of penalties for non-compliance, thereby supporting their growth and sustainability.