{"id":4079,"date":"2020-02-25T13:09:51","date_gmt":"2020-02-25T13:09:51","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=4079"},"modified":"2020-12-23T17:54:49","modified_gmt":"2020-12-23T12:24:49","slug":"corporate-frauds","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/corporate-frauds\/","title":{"rendered":"Corporate Frauds: A Comprehensive Study"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The\nCorporate Frauds happening all over India needs some stringent provisions to\ntackle with them. Corporate Frauds occur when a company or entity intentionally\nalter and conceals subtle information. The problem came with their rise in\noccurrence and sternness. This high frequency of Corporate Frauds demanded rigid\npenalties, ideal punishment, and efficient enforcement of the law with the correct\nstrength. &nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/corporate-frauds\/#What_are_the_Different_Types_of_Corporate_Frauds\" >What\nare the Different Types of Corporate Frauds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/corporate-frauds\/#What_are_the_Different_Types_of_Corporate_Frauds_under_the_Companies_Act_2013\" >What\nare the Different Types of Corporate Frauds under the Companies Act, 2013?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/corporate-frauds\/#What_is_the_Different_Types_of_Punishment_for_Corporate_Frauds_under_Companies_Act_2013\" >What is the Different Types of Punishment for Corporate Frauds under Companies Act, 2013?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/corporate-frauds\/#What_are_Corporate_Frauds_Reporting_under_Companies_Act_2013\" >What\nare Corporate Frauds Reporting under Companies Act, 2013?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Different_Types_of_Corporate_Frauds\"><\/span>What\nare the Different Types of Corporate Frauds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> To commit a Fraud, an act should be committed by a party, who is a party to an agreement with a rationale to trick the other party. The person if intentionally commits any Corporate Frauds will be punished for his\/her wrongful acts. There are many types of Corporate Frauds like False Fiscal Statements, Employee Fraud, Merchant Fraud, Consumer Fraud, Investment Scam, Insolvency Frauds, and many more. Some common types of Corporate Frauds are: <\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/Corpbiz-new-pic.png\" alt=\"Different Types of Corporate Frauds\" width=\"562\" height=\"430\"\/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Different_Types_of_Corporate_Frauds_under_the_Companies_Act_2013\"><\/span>What\nare the Different Types of Corporate Frauds under the Companies Act, 2013?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Under the Companies Act, 2013, there are several Corporate Frauds which are dealt with in detail. Here is the list of the Corporate Frauds listed under the Companies Act, 2013:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Different-Types-of-Corporate-Frauds-under-the-Companies-Act-2013.png\" alt=\"Different Types of Corporate Frauds under the Companies Act, 2013\" class=\"wp-image-22708\" width=\"568\" height=\"574\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Different-Types-of-Corporate-Frauds-under-the-Companies-Act-2013.png 1000w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Different-Types-of-Corporate-Frauds-under-the-Companies-Act-2013-297x300.png 297w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Different-Types-of-Corporate-Frauds-under-the-Companies-Act-2013-768x776.png 768w\" sizes=\"(max-width: 568px) 100vw, 568px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Different_Types_of_Punishment_for_Corporate_Frauds_under_Companies_Act_2013\"><\/span>What is the Different Types of Punishment for Corporate Frauds under Companies Act, 2013?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/What-is-the-Different-Types-of-Punishment-for-Corporate-Frauds-under-Companies-Act-2013.png\" alt=\"Different Types of Punishment for Corporate Frauds under Companies Act, 2013\" class=\"wp-image-22709\" width=\"503\" height=\"693\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/What-is-the-Different-Types-of-Punishment-for-Corporate-Frauds-under-Companies-Act-2013.png 720w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/What-is-the-Different-Types-of-Punishment-for-Corporate-Frauds-under-Companies-Act-2013-218x300.png 218w\" sizes=\"(max-width: 503px) 100vw, 503px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Punishment\nfor Fraud under Section 447<\/h3>\n\n\n\n<p><em><strong>If any person or company is guilty of fraud involving an amount of at least 10 lakhs rupees or 1% of the turnover of the company, whichever is lower shall be punished with-<\/strong><\/em><\/p>\n\n\n\n<ul><li>Imprisonment which should not be less than 6\nmonths which can be extended to 10 years and;<\/li><li>A fine which should not be less than the amount\nof fraud and which may extend to 3 times the amount of fraud. <\/li><\/ul>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> If the Fraud involves public interest at large then:<\/div>\n\n\n\n<ul><li>Imprisonment of the term which can extend up to\n5 years or,<\/li><li>With fine which can be extended up to 50 lakhs\nof Rupees, or both<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Punishment\nfor False Statement under Section 448<\/h3>\n\n\n\n<p>If\nany <strong><em>person\nor company knowingly makes<\/em><\/strong> a <strong><em>false statement regarding the material facts\nand particulars of the company, then the person will be punished with under the\nprovisions of Section 447.<\/em><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Punishment\nfor False Evidence under Section 449<\/h3>\n\n\n\n<p><strong><em>If\nany person or company intentionally give any false evidence<\/em><\/strong>&#8212; <\/p>\n\n\n\n<ul><li>Upon assessment on oath<\/li><li>Of any Document Submitted during Winding up of Company<\/li><li>Or any Matter Related to the company<\/li><\/ul>\n\n\n\n<p><strong><em>Shall\nbe punished with:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Imprisonment of 3 years which can be extended to\n7 years and;<\/li><li>With fine which can be extended to 10 lakhs of\nRupees<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Punishment where No Specific Penalty is provided under Section 450<\/h3>\n\n\n\n<p><strong><em>If\nany person or company contravenes with the provisions of the Companies Act,\nshall be punished with<\/em><\/strong>:<\/p>\n\n\n\n<ul><li>A fine which can be extended to 10,000 Rupees<\/li><li>If the contravention continues then further fine\nwill be imposed of 1000 Rupees per day<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Punishment in Case of Repeated Default under Section 451<\/h3>\n\n\n\n<p><strong><em>If\nany person or company commits the same offence for the second, shall be\npunished with:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Twice the amount of fine and;<\/li><li>The imprisonment prescribed for that offence <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Punishment\nfor Wrongfully Withholding of Property under Section 452<\/h3>\n\n\n\n<p><strong><em>If a person is having wrongful\npossession of the company&#8217;s property, shall be punished with:<\/em><\/strong><\/p>\n\n\n\n<ul><li>With fine of Rupees 1 lakh which can be extended\nto 5 lakhs of Rupees<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Punishment for the Use of Limited or Private Limited under Section 453<\/h3>\n\n\n\n<p><strong><em>If\nany person improperly uses the words &#8216;Limited&#8217; or &#8216;Private Limited&#8217;, will be\npunished with:<\/em><\/strong><\/p>\n\n\n\n<ul><li>A fine, which should not be less than 500 rupees\nand can be extended up to 2000 rupees per day.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Adjudication\nof Penalties under Section 454<\/h3>\n\n\n\n<p><strong><em>The\nCentral Government by the order can publish in the Official Gazette about the appointment\nof the Adjudicating Officers. The Government should specify the jurisdiction of\nthese Officers. The Adjudicating Officer can:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Impose a penalty on the Company or the Officer\nof Company who is in default<\/li><li>Can direct the Company or the Officer of Company\nto rectify the default<\/li><\/ul>\n\n\n\n<p><strong><em>If\nthe company fails to follow the order, shall be punished with:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Fine which shall not be less than 25,000 Rupees\nand can be extended to 5 lakhs of Rupees<\/li><\/ul>\n\n\n\n<p><strong><em>If\na person fails to comply with the orders passed by the Adjudicating Officer,\nshall be punished with-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Imprisonment, which may be extended to 6 months\nor;<\/li><li>With fine which should not be less than 25,000 rupees\nbut can be extended to 1 lakh Rupees.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_Corporate_Frauds_Reporting_under_Companies_Act_2013\"><\/span>What\nare Corporate Frauds Reporting under Companies Act, 2013?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Under\nSection 143 of the Companies Act, 2013, the provisions related to Fraud\nReporting are explained<\/em><\/strong>. <strong><em>During\nhis\/her course of employment, if the Auditor thinks that there is fraud\ncommitted in the company, he\/she shall immediately share this information to\nthe Board of Directors of the Company<\/em><\/strong>. 3 Auditors have the\nresponsibility to detect fraud and inform about this to the Board of Directors.\nThe 3 Auditors who are responsible are as follows:<\/p>\n\n\n\n<ul><li>Statutory Auditor <strong><em>(appointed as per Section 139 of\nthe Companies Act, 2013)<\/em><\/strong><\/li><li>Cost Auditor <strong><em>(appointed as per Section 148 of\nthe Companies Act, 2013)<\/em><\/strong><\/li><li>Secretarial Auditor <strong><em>(appointed as per Section 204 of\nthe companies Act, 2013)<\/em><\/strong><\/li><\/ul>\n\n\n\n<p><strong><em>If the Auditor does not\nfollow the rules prescribed under Section 143, then he\/she will be punished\nwith- <\/em><\/strong><\/p>\n\n\n\n<ul><li>A fine which should not be less than 1 lakh\nRupees and can be extended to 25 lakhs Rupees.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Conclusion<\/h3>\n\n\n\n<p> There are stringent provisions in the <strong>Companies Act, 2013<\/strong><sup><a href=\"https:\/\/www.mca.gov.in\/Ministry\/pdf\/CompaniesAct2013.pdf\">[1]<\/a><\/sup>; deal with the problem of Corporate Frauds indicates how serious the problem is in the corporate world. Corporate Frauds happens when the entities deliberately provide fraudulent information with the intention to gain an advantage. Corporate Frauds are very tiresome and long-lasting to be dealt with. We at&nbsp;<a href=\"https:\/\/corpbiz.io\"><strong>Corpbiz<\/strong><\/a>&nbsp;have qualified and proficient professionals to help you with Corporate Frauds in your Company. Our professional will direct you and assist you in getting through the procedure to be followed. Our professionals will plan correctly and will assure the successful completion of your Matter.&nbsp; &nbsp;&nbsp; <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Corporate Frauds happening all over India needs some stringent provisions to tackle with them. Corporate Frauds occur when a company or entity intentionally alter and conceals subtle information. The problem came with their rise in occurrence and sternness. This high frequency of Corporate Frauds demanded rigid penalties, ideal punishment, and efficient enforcement of the [&hellip;]<\/p>\n","protected":false},"author":16,"featured_media":4083,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[272],"tags":[357],"acf":{"service_id":"220"},"authorName":"Sakshi Sharda","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/sakshi-sharda.jpg","authorDescription":"Sakshi Sharda has done BBALLB(HONS) and holds a strong knowledge on the matters pertaining to finance and law. From the past one year she is working as a legal advisor and in her leisure time she works on improvising her knowledge. Sakshi is spreading her knowledge by writing for Corpbiz.","postViews":10325,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4079"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=4079"}],"version-history":[{"count":17,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4079\/revisions"}],"predecessor-version":[{"id":22710,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4079\/revisions\/22710"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/4083"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=4079"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=4079"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=4079"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}