Exemptions To Private Limited Companies – 2017

Sl.

Chapter/ Section number/ Sub-section(s) in the

Exceptions/ Modifications/Adaptations, as the

case

Remarks

Companies Act, 2013 and Description of the

may be, as per the Notification

No.

Section, under which the changes were proposed.

1.

Exception:-

So  a  OPC,  Dormant  Company,

Small Company and a Start-up

èFinancialStatement, with respect to one person

Company, being a Private Limited

company, small company, dormant company and

Company,  are  not  required  to

private company (if such private company is a start-

prepare Cash Flow Statement as

up) may not include the cash flow statement;

part of their Financial Statements

Explanation: For the purposes of this Act, the term

„start-up? or “start-up company” means a private

company incorporated under the Companies Act, 2013

(18 of 2013) or the Companies Act, 1956 (1 of 1956) and

recognised  as  start-up  in  accordance  with  the

notification issued by the Department of Industrial

Policy and Promotion, Ministry of Commerce and

Industry.”.

2.

Chapter V, Clauses (a) to (e) of sub-section (2) of

Exemption/Adaptation:-

Exemption to

section 73 (Acceptance of deposits from its

(a)  private  companies  which

Members)

Shall not apply to private companies which:

propose to accept monies from its

[Modification to an existing exemption granted

èacceptsfrom its members monies not exceeding

members not exceeding 100 % of

through notification Dt: 05.06.2015]

100 % of aggregate of the paid up share capital, free

aggregate of the Paid-up Share

reserves and securities premium account; or

Capital  and  Free  Reserves  and

èwhichisastart-up, for five years from the date of its

securities premium; or

incorporation; or

(b) Start-ups for a period 5 years

èwhichfulfils  all  of  the  following  conditions,

namely:-

from the date of incorporation; or

(a) which is not an associate or a subsidiary

(c) A company not being a associate

company of any other company;

or subsidiary of another company,

with borrowings less than twice of

(b) if the borrowings of such a company from

its paid up share capital or Rs.50

banks or financial institutions or any body

Crores, whichever is lower, and has

corporate is less than twice of its paid up share

not defaulted in repayment   of

capital or Rs.50 Crores, whichever is lower; and

borrowings/deposits.

(c) such a company has not defaulted in the

However, the details of deposits

repayment of such borrowings subsisting at the

accepted needs to be informed to

time of accepting deposits under this section:

the Registrar.

Provided that the company referred to in clauses (A),

(B) or (C) shall file the details of monies accepted to the

Registrar in such manner as may be specified.

3.

Chapter VII, clause (g) of sub-section (1) of

Exemption:

Disclosure as to the remuneration

section 92 (Annual Return)

drawn  by  the  directors  is  not

Shall apply to private companies which are small

required to be provided by Small

New Exemption

companies, namely:-

Companies, in the Annual Return

filed  with  the  Registrar  of

“(g) aggregate amount of remuneration drawn by

Companies.

directors;”.

4.

Chapter VII, proviso to sub-section (1) of section

Exemption/Adaptation:

Exemption/Adaptation, to provide

92 (Annual Return)

For the proviso, the following proviso shall be substituted,

that in case of a Start-up Private

Company, the annual return shall

New Exemption/Adaptation.

namely:-

Provided that in relation to One Person Company, small

be signed by the CS, and if there is

no CS, then by the Director of the

company and private company (if such private company is

Company.

a start-up), the annual return shall be signed by the

company secretary, or where there is no company

secretary, by the director of the company.”.

5.

Chapter X, clause (i) of sub-section (3) of section

Exemption:

Exemption to the Auditors

with

143  (Powers  and  Duties  of  Auditors  and

regard to disclosure in their report,

Auditing  Standards)-  Internal  Financial

Shall not apply to a private company:-

as to presence of IFC, in Company,

Controls

in relation to (a) a OPC or a small

(i) which is a OPC or a small company; or

company; or (b) Companies with

New Exemption

(ii) which has turnover less than Rs. 50 Crores, as per Turnover less than Rs. 50 Crores, or

latest  audited  financial  statement  or  which

has Borrowings from banks or financial

aggregate  borrowings  from  banks  or  financial institutions or any Body Corporate,

institutions or any body corporate at any point of time less than Rs.25 Crores.

during the financial year less than Rs.25 Crores.”.

6.

Chapter XII, sub-section (5) of section 173

Exemption/Adaptation:

Exemption/Adaptation,with

(Meetings of the Board)

relation to a Start-up Company, to

For sub-section (5), the following sub-section shall be provide  that  holding  of  one

New Exemption/Adaptation.

substituted, namely:-

meeting of the Board of Directors

in each half of a calendar year, with

7.

Chapter  XII,  sub-section  (3)  of  section

Exemption:

To provide for counting of the

174.(Quorum for meetings of the Board)

interest director for quorum, after

Shall apply with the exception that the interested

the said interested director has

New Exemption

director may also be counted towards quorum in such

disclosed his interest as required

meeting after disclosure of his interest pursuant to

under Section 184.

Section 184.