Section 446 of the Companies Act, 2013
Section 446 of the Companies Act, 2013 deals with offenses by companies and their officers and the liability of persons in charge of the company for offenses under the Act.
🔹 Section 446 – Offenses by Companies and Officers
📘 Bare Act Language:
Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of its business, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing in this section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge, or that he exercised all due diligence to prevent the commission of such offence.
Where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
🧠Explanation:
If a company commits an offence under the Companies Act, the company itself and every person in charge of the company’s business at that time can be held criminally liable.
Such persons can defend themselves by proving:
They did not know about the offence, or
They took all due care and precautions to prevent the offence.
Additionally, if the offence was committed with the consent, knowledge, or negligence of a director, manager, secretary, or other officer, they too can be held personally liable.
✅ Purpose:
Ensures accountability of not just the company but also its key officers.
Promotes due diligence and responsible management.
Prevents officers from hiding behind the company’s legal personality.
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