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    Question

    As per the Companies Act, what is the minimum threshold

    of fraud that attracts imprisonment and a fine?
    A Rs. 5 lakhs Correct Answer Incorrect Answer
    B Rs. 10 lakh or 1% of the company’s turnover, whichever is lower Correct Answer Incorrect Answer
    C Rs. 20 lakhs Correct Answer Incorrect Answer
    D 1% of the company’s turnover only Correct Answer Incorrect Answer
    E Rs. 15 lakhs Correct Answer Incorrect Answer

    Solution

    Section 447. Punishment for fraud: Without prejudice to any liability including repayment of any debt under this Act or any other law for the time being in force, any person who is found to be guilty of fraud involving an amount of at least ten lakh rupees or one percent. of the turnover of the company, whichever is lower, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud.

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