Compounding of Offence
Compound non-criminal offences under the Companies Act 2013 — application to ROC or NCLT, determination of compounding fee, board resolution and representation before the authority.
Compound an offence under Companies Act
Share the nature of default. We will assess compounding eligibility and handle the complete application.
Talk to a CS →A complete compounding of offence package
Default Assessment
Identification of the offence, applicable section, period of default and whether it is compoundable.
Compounding Application
Drafting and filing of compounding application before the ROC (for lesser penalties) or NCLT (for others).
Board Resolution
Board resolution authorising the compounding application and acknowledging the default.
Compounding Fee Calculation
Calculation of the compounding fee (sum not exceeding the maximum penalty) and payment.
Representation
Representation before the ROC or NCLT at the time of hearing of the compounding application.
Order & Compliance Record
Compounding order obtained and maintained in company's compliance records to avoid recurrence.
What is needed for compounding of offence
Only Non-Criminal Offences
Only offences not punishable with imprisonment alone (or with imprisonment and fine) can be compounded.
ROC for Offences Below Rs 5 Lakh
Offences where maximum penalty is less than Rs 5 lakh — compounded by the ROC directly.
NCLT for Others
Offences where maximum penalty is Rs 5 lakh or more — compounded by the NCLT.
Prior RD/CG Approval Not Needed
Compounding under Section 441 does not require prior approval from the Regional Director or Central Government.
No Repeat Within 3 Years
If the same offence was compounded in the last 3 years, a fresh compounding application for the same offence is not maintainable.
Company Not Under Investigation
Compounding is not available if the company is under investigation by the Serious Fraud Investigation Office (SFIO).
Compounding is not available for all defaults. Offences punishable with imprisonment only, or where the company is under SFIO investigation, cannot be compounded. We assess your specific default first to confirm eligibility before filing the application.
Common issues with compounding of offence
Simple steps, no surprises
Default assessed
Nature of offence, applicable section, penalty range and compoundability confirmed.
Application prepared
Board resolution passed, compounding application drafted with supporting documents.
Filed before ROC / NCLT
Application filed before the appropriate authority — hearing date obtained.
Order received
Compounding fee paid, order received and default rectified — compliance record updated.
Other services you may need
Frequently asked questions
Compounding is the process by which a company or officer settles a non-criminal offence under the Companies Act by paying a fee (not exceeding the maximum penalty) — avoiding prosecution. It is provided under Section 441 of the Companies Act 2013.
Offences where the maximum penalty is less than Rs 5 lakh are compounded by the Registrar of Companies (ROC). Offences with a higher maximum penalty are compounded by the National Company Law Tribunal (NCLT).
No. Only offences that are not punishable with imprisonment alone or imprisonment and fine can be compounded. Offences under investigation by SFIO cannot be compounded.
No. If a compounding order was passed for the same offence within the previous 3 years, a fresh compounding application for that offence is not maintainable.
The compounding fee is determined by the ROC or NCLT and cannot exceed the maximum penalty prescribed under the relevant section of the Companies Act 2013.
Need to compound an offence under the Companies Act?
We assess eligibility, draft the application and represent you before the ROC or NCLT.