Section 446A explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 446A tells the court or the Special Court what to consider when it decides the amount of a fine or the length of imprisonment under the Companies Act. It lists five factors: the size of the company, the nature of its business, injury to public interest, the nature of the default and repetition of the default. The court must have "due regard" to them.
When the court or the Special Court decides the amount of fine or imprisonment under the Act, it must have due regard to five factors: (a) size of the company, (b) nature of business, (c) injury to public interest, (d) nature of the default and (e) repetition of the default. The section sets no fixed amounts and does not change the limits in other sections. It was inserted by the Companies (Amendment) Act, 2017.
The five factors at a glance
| Clause | Factor | What a court would look at |
|---|---|---|
| (a) | Size of the company | Capital, turnover, number of members and employees, whether it is a small company or a large one |
| (b) | Nature of business carried on | Whether the business touches deposits, public money, regulated activity or a purely private venture |
| (c) | Injury to public interest | Whether investors, creditors, employees or the public were harmed |
| (d) | Nature of the default | Technical or procedural slip, or wilful and deceptive conduct |
| (e) | Repetition of the default | Whether it is a first lapse or a repeat |
The second column is explanatory; the statute lists only the five factors and gives no detail on how each is weighed. The footnote in the official text shows section 446A was inserted by section 91 of the Companies (Amendment) Act, 2017, with effect from 9-2-2018.
What the section does and what it does not do
Section 446A is a guide for discretion. The words are "shall have due regard", so the court must consider each factor, but the statute does not say how much weight each carries or that any one factor decides the outcome.
It does not create or raise a penalty. The fine or imprisonment in each offence section still sets the range, and the court chooses within that range. It also speaks only of "the court or the Special Court". Penalties imposed by an adjudicating officer are dealt with separately under section 454; see section 454 on adjudication of penalties. This article does not assume that section 446A governs an adjudicating officer, because the text does not say so.
If your company is facing a complaint, a legal dispute resolution adviser can help you place the facts under these five heads before the hearing.
Reading each factor
Size of the company. A very small company and a large company with thousands of members are not in the same position. Elsewhere the Act already gives lighter penalties to certain companies; section 446B limits penalties for a One Person Company, small company, start-up company or Producer Company to not more than one-half of the specified penalty, subject to Rs 2 lakh for a company and Rs 1 lakh for an officer. That applies to penalty, while section 446A applies to fines and imprisonment decided by the court.
Nature of business. A company collecting deposits from the public stands differently from a closely held trading company, because more people can be hurt by a default.
Injury to public interest. This is where a default that hurt investors, depositors or creditors can weigh heavily, and where a purely internal lapse that hurt nobody can weigh lightly.
Nature of the default. A late filing, an incorrect figure and a deliberate misstatement are different kinds of default. Section 447 on fraud is a separate provision with its own punishment; see our note on fraud under the Companies Act.
Repetition of the default. A second offence of the same kind will be viewed differently from a first. For repeat default in the penalty (adjudication) setting, section 454A provides a specific rule of double penalty; see section 454A.
How to use this in practice
Factor (e) rewards a clean history, and factor (d) rewards promptly correcting a technical slip. If a default has happened, correcting the filing and keeping a record of the steps taken shows the court the nature of the default. Factors (a) to (c) are facts about the company and the harm caused, so they should be documented early, not reconstructed at the hearing.
Example. Two companies are prosecuted for the same default in an offence section that provides for fine or imprisonment. One is a small private company with no outside investors that corrected its records within days of notice. The other is a company with many members whose default left investors without information for a year. Under section 446A the court must have due regard to size, business, injury to public interest, the nature of the default and whether it was repeated, so the same section can lead to different results for these two. The actual result remains a matter for the court within the range in the offence section.
Proposed change
We searched the Corporate Laws (Amendment) Bill, 2026 and did not find a clause amending section 446A. The Bill is pending, not law.
Need help with a prosecution or penalty notice?
If a complaint or notice has been received, collect the facts on size, business, harm, nature and history before you respond. Our team can help you prepare that record and the reply through our legal dispute resolution support.
Key takeaways
- Section 446A applies to the court or the Special Court when deciding the amount of fine or imprisonment under the Act.
- The five factors are size of the company, nature of business, injury to public interest, nature of the default and repetition of the default.
- The court must have due regard to them; the section gives no formula.
- It does not raise or lower the limits in the offence sections.
- It was inserted by the Companies (Amendment) Act, 2017 (w.e.f. 9-2-2018).
Read next
- Section 454A: penalty for repeated default
- Sections 443 to 445: company prosecutors and appeal against acquittal
- Section 454: adjudication of penalties by ROC
- Section 86: punishment for charge contraventions
Disclaimer: Based on the Companies Act, 2013 as amended up to 1 April 2021 (official consolidated text), read with later developments noted in the article; proposals in the Corporate Laws (Amendment) Bill, 2026 are pending and not law as on 30 September 2026. Verify current notifications and rules before acting.