Companies Act Section 404

Companies Act, Section 404: Fees, Charges, and Other Sums to be Credited into the Public Account of India

Section 404 of the Companies Act, 2013 lays down a crucial financial accountability mechanism relating to all monetary receipts collected by government authorities while enforcing the Act. 

It ensures that every form of statutory income generated through company administration is properly transferred into the Public Account of India.

This provision applies to all sums received under any provision of the Companies Act by:

The Registrar of Companies (ROC), Additional Registrars, Joint Registrars, Deputy Registrars, Assistant Registrars, and any other officer of the Central Government authorized under the Act.

All such fees, charges, penalties, or any other kinds of amounts collected must be deposited into the Public Account of India, which is maintained with the Reserve Bank of India (RBI).

Purpose and Importance of Section 404

The section is enacted with a strong intention to uphold financial discipline and good governance. It serves several important functions:

1. Ensures financial transparency

All receipts are recorded centrally in recognized government accounts. It helps in maintaining proper audit trails for every payment made by companies and stakeholders.

2. Prevents unauthorized handling of funds

Officers who collect the funds are not permitted to retain or utilize them locally. Eliminates any possibility of misuse, diversion, or irregular accounting of statutory revenues.

3. Supports efficient public financial management

Centralized deposit into the Public Account allows the Government of India to oversee and regulate how funds are used.

The funds become part of public revenue and can be allocated for national development, governance activities, or administrative expenses.

4. Reinforces legal compliance

When companies pay fees for registrations, filings, or penalties, those payments are treated as public money governed by financial laws and constitutional safeguards.

Helps align corporate regulatory processes with national fiscal responsibilities.

5. Strengthens accountability of authorities

Officials involved in corporate regulation remain accountable for every amount received under the Act.

Regular monitoring and auditing by statutory agencies ensure integrity in financial operations.

Scope of Monetary Collections Covered

Section 404 includes all kinds of revenue arising from compliance obligations, such as:

Filing and registration fees for company documents, charges for certifications, approvals, or regulatory actions, penalties or fines imposed for violations of the Act, and any other sums prescribed under the rules made pursuant to the Act.

No exception exists unless specifically authorized by the Central Government under law.