Compounding Application 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.
When a company or its officer has committed a compoundable offence under the Companies Act, 2013, section 441 lets the offence be settled by paying a sum specified by the Tribunal or the Regional Director rather than going through prosecution. The application is a formal petition with an index, particulars, facts, grounds, prayer and affidavits. This article gives a specimen and explains how each part works.
The application is made to the Registrar, who forwards it with his comments to the Tribunal or the Regional Director (or an officer authorised by the Central Government). The company and the officer in default are the petitioners. An offence punishable with imprisonment only, or with imprisonment and also with fine, cannot be compounded, and a second similar offence within three years of an earlier compounding cannot be compounded under the section (section 441(1), (2) and (6)). After compounding, the company must intimate the Registrar within seven days. The format follows the specimen as a model; check the current form, forum and procedure before filing.
When you need a compounding application
Use it when a default has occurred, for example a late filing or a breach of a provision for which the Act prescribes a fine only, and the company wants to regularise the position and close the matter. It may be filed before or after any prosecution begins. Our section 441 process guide and the special courts and compounding overview explain the legal framework, and appearing before the Registrar in compounding covers conduct of the matter. For handling the application end to end, see our compounding of offences service.
Specimen compounding petition
BEFORE THE / NATIONAL COMPANY LAW TRIBUNAL, ] COMPANY PETITION NO. OF IN THE MATTER OF SECTION 441 OF THE COMPANIES ACT, 2013 (For the offence committed under section of the Companies Act, 2013) IN THE MATTER OF: , having its registered office at ...PETITIONER NUMBER 1 AND , Director, son/daughter of , residing at ...PETITIONER NUMBER 2 INDEX OF DOCUMENTS S. No. | Particulars | Annexure | Page No. 1. Petition under section 441 of the Companies Act, 2013 | - | 2. Affidavits verifying the petition | Annexure | 3. Certificate of incorporation, Memorandum and Articles of Association | Annexure | 4. Board resolution authorising the petition and power of attorney | Annexure | 5. List of officers in default and authorised signatories | Annexure | 6. | Annexure | For Petitioner number 1: , Director, DIN , , Petitioner number 2: , , , , PETITION UNDER SECTION 441 OF THE COMPANIES ACT, 2013 FOR COMPOUNDING OF THE OFFENCE UNDER SECTION OF THE COMPANIES ACT, 2013 The petitioners most respectfully show: I. PARTICULARS OF THE COMPANY 1. The Company was incorporated as a company on under certificate of incorporation issued by the Registrar of Companies, . 2. The registered office of the Company is at . 3. The authorised, issued, subscribed and paid-up capital is divided into shares of each. 4. The Company carries on the business of . A certified copy of the certificate of incorporation, memorandum and articles is annexed as Annexure . II. PARTICULARS OF THE PETITIONERS Petitioner number 1 is the Company. Petitioner number 2 is a Director and the person designated by the Board as responsible for compliance. Their particulars are in the affidavits at Annexure . III. JURISDICTION The subject matter lies within the jurisdiction of the Registrar of Companies, , the Regional Director, and the Tribunal at , determined by the registered office of the Company and section 441, under which the Registrar forwards the application to the appropriate authority. IV. LIMITATION V. FACTS OF THE CASE 1. 2. 3. 4. The default was made good on by . 5. Petitioner number 2 has been identified by the Board as the officer responsible for compliance and is the only officer in default; the list of officers in default and signatories is at Annexure . 6. The Board at its meeting on approved this petition and authorised as representative; a copy of the resolution and the power of attorney, with the memorandum of appearance of , is at Annexure . 7. The contravention of section is an offence that the Act permits to be compounded, and the Petitioners are applying on their own motion. 8. VI. MATTERS NOT PREVIOUSLY FILED OR PENDING The Petitioners declare that they have not filed any other application, writ petition or suit about this matter before any court, tribunal or authority, and none is pending. The Petitioners act in good faith. VII. GROUNDS AND RELIEF Grounds: 1. The default occurred because and not through deliberate wrongdoing. 2. It has been made good, and all reasonable steps have been taken to prevent recurrence. 3. No person is prejudiced by compounding. 4. Relief: The Petitioners pray that the offence under section of the Companies Act, 2013 be compounded on such sum as may be specified, and that such further orders be made as are just. VIII. INTERIM ORDER SOUGHT: IX. PARTICULARS OF PAYMENT: For Petitioner number 1: For Petitioner number 2: Place: Date: X. LIST OF ANNEXURES: AFFIDAVIT VERIFYING THE PETITION (BY THE DIRECTOR ON BEHALF OF THE COMPANY) I, , Director of , do solemnly affirm and state: 1. I am a Director and authorised representative of Petitioner number 1. 2. I have read the petition and the statements in paragraphs I to VI are true to my knowledge and belief. 3. Paragraph VII is the prayer and paragraph X is the list of annexures. Deponent: VERIFICATION: I, the deponent, verify that the contents of paragraphs 1 to 3 are true to my knowledge and belief, that nothing material has been concealed and no part is false. Verified at on . Deponent: AFFIDAVIT VERIFYING THE PETITION (BY PETITIONER NUMBER 2) I, , son/daughter of , aged , residing at , do solemnly affirm and state: 1. I am a Director of Petitioner number 1 and Petitioner number 2. 2. I have read the petition and the statements in paragraphs I to VI are true to my knowledge and belief. 3. Paragraph VII is the prayer and paragraph X is the list of annexures. Deponent: VERIFICATION: as above. Verified at on . Deponent:
Clause-by-clause explanation
| Part | What it does | Drafting tip |
|---|---|---|
| Cause title | Names the forum and the section | Describe the offence section exactly |
| Index of documents | Lists the petition, affidavits and annexures | Number annexures and pages consistently |
| Particulars of the company | Identifies the petitioner | Attach certified copies of the incorporation documents |
| Particulars of the petitioners | Identifies the officer in default | Name only those who are in default |
| Jurisdiction and limitation | Shows the forum can hear it | Do not assert a limitation period you cannot support from the Act |
| Facts | Tells the story of the default and its correction | State dates and the corrective step |
| Matters not filed | Discloses other proceedings | Be candid about any prosecution or notice |
| Grounds and relief | Explains why compounding is warranted | Keep the prayer to compounding and further orders |
| Affidavits | Verify the petition | Verify the paragraphs of facts, not the prayer |
The law behind it
Section 441(1). An offence punishable under the Act, whether committed by a company or an officer, not being an offence punishable with imprisonment only, or with imprisonment and also with fine, may be compounded before or after prosecution by the Tribunal, or, where the maximum fine does not exceed twenty-five lakh rupees (as the text we hold prints it), by the Regional Director or an officer authorised by the Central Government, on payment or credit to the Central Government of the sum specified. The sum cannot exceed the maximum fine for the offence, and any additional fee paid under section 403(2) is taken into account. An offence cannot be compounded if an investigation against the company has been initiated or is pending under the Act.
Section 441(2). The section does not apply to an offence committed within three years of a similar offence being compounded; an offence after three years is deemed a first offence.
Section 441(3). The application is made to the Registrar, who forwards it with his comments. After compounding, the company intimates the Registrar within seven days. If compounded before prosecution, no prosecution may be instituted; if after, the Registrar brings the compounding to the notice of the court and the company or officer is discharged.
Section 441(4) and (5). The authority may direct filing of a missing return or document on payment of fee and additional fee under section 403; if the direction is not obeyed, the maximum fine for compounding becomes twice the amount provided in the corresponding section.
Section 441(6) and (7). Offences punishable with imprisonment only, or imprisonment and fine, are not compoundable, and no offence may be compounded except under this section.
Fees, forms and procedures are not stated here. Check the current rules, forms and the forum's practice before filing.
Stamp duty, registration and execution
A petition before a tribunal or the Regional Director is not a registrable instrument; stamp or court fee, if any, is payable as per the applicable law and rules. Affidavits are sworn before a person authorised to administer oaths, using stamp paper if the State's law requires; see our affidavit guide and stamp duty overview. The petition is signed by both petitioners, supported by the Board resolution, and filed with the annexures.
Common mistakes
- Applying to compound an offence that carries imprisonment, which section 441(6) bars.
- Filing within three years of an earlier compounding of a similar offence.
- Not disclosing a pending investigation, which stops compounding under the third proviso to section 441(1).
- Naming every director as an officer in default when only one is responsible.
- Claiming the default was made good without proof or dates.
- Missing the seven-day intimation to the Registrar after compounding.
- Omitting the Board resolution and power of attorney.
- Verifying the prayer paragraph as if it were a statement of fact.
Need help with compounding?
Compounding requires an accurate statement of the default, a clean compliance record and a petition that the authority can act on. Our team prepares the petition, the affidavits and the supporting annexures and follows the matter through. See compounding of offences. If the default stems from a missed meeting, you may also read our application to NCLT to call an annual general meeting.
Key takeaways
- The application goes to the Registrar, who forwards it with comments.
- Imprisonment-only and imprisonment-and-fine offences are not compoundable.
- A repeat within three years cannot be compounded.
- Intimate the Registrar within seven days of compounding.
- Verify facts by affidavit and attach the Board resolution.
Read next
- Compounding of offences under the Companies Act: section 441 process
- Sections 435 to 441: special courts and compounding
- Appearing before the Registrar: inspection, show cause and compounding
- Winding up petition format (Form WIN 1)
Disclaimer: This specimen is a general model for information. Every document must be adapted to its facts and to the law, rules and forms in force when it is signed or filed; stamp duty, registration and court fees depend on the State and the forum. This article is general information, not legal advice; check the official text before acting.