Section 450 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.
The Companies Act contains hundreds of obligations, and only some of them carry their own penalty.
Section 450 fills every gap. If you've breached something and can't find a penalty attached to it, this is where you look — and it means there's no such thing as a breach with no consequence.
₹10,000, plus ₹1,000 for each day a contravention continues — capped at ₹2,00,000 for a company and ₹50,000 for an officer. It covers breaches of the Rules as well as the Act, and breaches of conditions attached to an approval or exemption. Since 2020 it's a penalty, not a fine — so it's adjudicated, and halved for small companies.
The structure
| Element | Detail |
|---|---|
| Trigger | Contravention of any provision of the Act or the Rules, or of any condition attached to an approval, sanction, consent, confirmation, recognition, direction or exemption |
| Precondition | No penalty or punishment is provided elsewhere in the Act for that contravention |
| Who is liable | The company, every officer in default, or such other person |
| Base penalty | ₹10,000 |
| Continuing contravention | ₹1,000 for each day after the first |
| Cap — company | ₹2,00,000 |
| Cap — officer or other person | ₹50,000 |
One change worth knowing. The Companies (Amendment) Act, 2020 converted Section 450 from a fine into a penalty. That matters in three ways: it's now adjudicated administratively by the Registrar under Section 454 rather than prosecuted in a criminal court; there's no criminal record; and it attracts the Section 446B reduction for small companies, OPCs, start-ups and Producer Companies.
Where it actually bites
Common examples in a private company:
| Breach | Why Section 450 |
|---|---|
| Fewer than the minimum Board meetings under Section 173(1) | Section 173(4) penalises only failure to give notice, not the shortfall in meetings |
| Failure to dematerialise under Rule 9B | The PAS Rules prescribe no penalty for Rule 9B |
| MBP-2 not maintained under Section 186(9) | Section 186(13) addresses the substantive limits; the register default falls here |
| DPT-3 not filed | Via Rule 21 of the Deposit Rules and the general provision |
| Breach of a condition in an RD order — say under Section 12(5) or Section 14 | Expressly covered: "any condition… subject to which any approval… has been accorded" |
| Contravention of a Rule with no penalty of its own | Expressly covered: "or the rules made thereunder" |
And one worth reading twice. Section 450 covers a breach of "any condition… subject to which any… exemption… has been… granted".
The private company exemption notification under Section 462 is granted subject to the condition of no default under Sections 92 and 137. So on the text of Section 450, acting in reliance on an exemption while in breach of its condition is itself a contravention. The exemption condition →
How it's imposed
Through Section 454 adjudication:
- The Registrar issues a show-cause notice — not less than fifteen, not more than thirty days to reply.
- You may make a written representation and seek a personal hearing.
- An order imposes the penalty and directs rectification.
- Payable within ninety days.
- Appeal to the Regional Director within sixty days, in Form ADJ.
- Non-payment attracts a further fine — ₹25,000 to ₹5,00,000 on the company, and ₹25,000 to ₹1,00,000 or up to six months' imprisonment, or both, on the officer.
What your representation should address. Section 454(3) requires the adjudicating officer to have regard to three things:
- the disproportionate gain or unfair advantage, wherever quantifiable, made from the default;
- the loss caused to an investor, group of investors, or creditors; and
- the repetitive nature of the default.
Those three are the argument. Write to them, not around them. How adjudication works →
The small company reduction
For a One Person Company, small company, start-up or Producer Company, or its officer in default, the Section 450 penalty is not more than one-half, subject to Section 446B's own caps of ₹2,00,000 and ₹1,00,000.
So a small company's exposure is:
- base: ₹5,000;
- continuing: ₹500 per day;
- cap: ₹1,00,000 for the company and ₹25,000 for an officer — half of the Section 450 caps, and within the 446B outer limits.
Key takeaways
- There is no breach without a consequence. Section 450 is the floor.
- It covers the Rules, not just the Act.
- It covers conditions attached to approvals and exemptions — including the filing condition on the private company exemptions.
- It's a penalty, not a fine, since 2020 — adjudicated, not prosecuted.
- Halved for small companies and start-ups.
- Address the three Section 454(3) factors in any representation.
Read next
- Penalties for Non-Compliance: Section-wise Chart
- Section 454: Adjudication of Penalties by the ROC
- Section 446B: Lesser Penalties for Small Companies and OPCs
- MCA Additional Fees for Late Filing
Disclaimer: Positions stated as on 4 September 2026. Take professional advice on any show-cause notice received under Section 454.