Penalties for Officers-in-Default Quiz

If the company fails to pay secured or unsecured deposits on maturity, then the company shall pay 18% per annum interest for the overdue period.

No, a company cannot alter any terms and conditions of a deposit, deposit trust deed, or deposit insurance contract which may prove disadvantageous to the interest of the depositors after a circular or advertisement is issued and deposits are accepted.

In the case of a public company, it shall disclose in its financial statements by way of a note about the money received from its directors.

In the case of a private company, it shall disclose in its financial statements by way of a note about the money received from the directors or the relatives of directors.

If any company inviting deposits or any other person contravenes any of the 'deposit rules' for which no punishment is provided in the Act, the company shall be punished.

The deadline for a company to file a duly audited Return (DPT-3) with the Registrar of Companies (ROC) containing information up to 31st March of every year is on or before 30th June.

The penalty for an officer-in-default for contravention of the rules is: 1) A fine extendable to five thousand rupees, and 2) In case the contravention is a continuing one, a further fine which may be extended to five hundred rupees for every day after the first day during which the contravention continues.

The validity period of a circular or advertisement is the earlier of: 1) 6 months from the closure of the financial year in which the circular is issued, or 2) The date of the Annual General Meeting (AGM) in which the financial statements were laid before the company.

The interest rate is calculated as follows:1) Round off the period in years, ignoring periods less than 6 months and rounding up to the next year for periods 6 months or more.2) Deduct 1% from the rate of interest for the period calculated in step 1.However, the 1% reduction is not applicable if the deposit is prematurely repaid by the company to bring the deposit amount within the prescribed limit, or to provide for war risk or other benefits to personnel of the armed forces during an emergency.

The 1% reduction in interest rate for premature repayment of a deposit does not apply if:1) The deposit is prematurely repaid by the company to bring the deposit amount within the prescribed limit.2) The deposit is prematurely repaid to provide for war risk or other benefits to personnel of the naval, military, air forces or their families during an emergency under Article 352 of the Constitution of India.

The maximum fine that can be imposed on an officer-in-default for a continuing contravention of the rules is five hundred rupees for every day after the first day during which the contravention continues.

The penal rate of interest is 18% per annum.

A company would have to pay the penal rate of interest if it accepted deposits without complying with the legal requirements and procedures laid down in the Companies Act.

The penal rate of interest at 18% per annum is likely higher than the maximum rate of interest a company can offer on deposits accepted legally.

The purpose of imposing a penal rate of interest is to deter companies from accepting deposits in violation of the Companies Act and to penalize them for non-compliance.

The penal rate of interest is likely not the only consequence, as there may be additional penalties or legal actions for companies that accept deposits in violation of the Companies Act.

The text does not specify the duration for which a company must pay the penal rate of interest on deposits accepted illegally.