All are aware that on 05.06.2015, the Ministry had issued Four Notifications all Dt: 05.06.2015, vide which the Minstry has provided certain exemptions/modifications and adaptations as to certain provisions of the Companies Act, 2013 which are applicable to:
èGovernment Companies
èNidhiCompanies (Nidhis)
èPrivateCompany
èSection8Companies (Companies not for profit)
Even after issue of the said notifications, there were/are many provisions under the Companies Act, 2013, that require relaxations, and upon the representations received by the Ministry, from the Trade and profession, as to difficulties in implementation, the Ministry has issued notification Dt:13.06.2017, providing further exemptions/modifications/adaptations applicable to:
èGovernment Companies
èPrivateCompany
èSection8Companies (Companies not for profit)
In this article, an effort is being made to look in to the further exemptions, modifications and adaptations to the provisions of the Companies Act, 2013, applicable to Private Limited Companies, as notified by the Ministry vide notification Dt:13.06.2017.
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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 |
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No. |
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Section, under which the changes were proposed. |
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1. |
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Exception:- |
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So a OPC, Dormant Company, |
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Small Company and a Start-up |
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èFinancialStatement, with respect to one person |
Company, being a Private Limited |
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company, small company, dormant company and |
Company, are not required to |
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private company (if such private company is a start- |
prepare Cash Flow Statement as |
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up) may not include the cash flow statement; |
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part of their Financial Statements |
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Explanation: For the purposes of this Act, the term |
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„start-up? or “start-up company” means a private |
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company incorporated under the Companies Act, 2013 |
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(18 of 2013) or the Companies Act, 1956 (1 of 1956) and |
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recognised as start-up in accordance with the |
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notification issued by the Department of Industrial |
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Policy and Promotion, Ministry of Commerce and |
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Industry.”. |
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2. |
Chapter V, Clauses (a) to (e) of sub-section (2) of |
Exemption/Adaptation:- |
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Exemption to |
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section 73 (Acceptance of deposits from its |
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(a) private companies which |
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Members) |
Shall not apply to private companies which: |
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propose to accept monies from its |
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[Modification to an existing exemption granted |
èacceptsfrom its members monies not exceeding |
members not exceeding 100 % of |
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through notification Dt: 05.06.2015] |
100 % of aggregate of the paid up share capital, free |
aggregate of the Paid-up Share |
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reserves and securities premium account; or |
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Capital and Free Reserves and |
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èwhichisastart-up, for five years from the date of its |
securities premium; or |
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incorporation; or |
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(b) Start-ups for a period 5 years |
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èwhichfulfils all of the following conditions, |
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namely:- |
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from the date of incorporation; or |
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(a) which is not an associate or a subsidiary |
(c) A company not being a associate |
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company of any other company; |
or subsidiary of another company, |
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with borrowings less than twice of |
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(b) if the borrowings of such a company from |
its paid up share capital or Rs.50 |
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banks or financial institutions or any body |
Crores, whichever is lower, and has |
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corporate is less than twice of its paid up share |
not defaulted in repayment of |
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capital or Rs.50 Crores, whichever is lower; and |
borrowings/deposits. |
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(c) such a company has not defaulted in the |
However, the details of deposits |
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repayment of such borrowings subsisting at the |
accepted needs to be informed to |
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time of accepting deposits under this section: |
the Registrar. |
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Provided that the company referred to in clauses (A), |
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(B) or (C) shall file the details of monies accepted to the |
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Registrar in such manner as may be specified. |
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3. |
Chapter VII, clause (g) of sub-section (1) of |
Exemption: |
Disclosure as to the remuneration |
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section 92 (Annual Return) |
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drawn by the directors is not |
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Shall apply to private companies which are small |
required to be provided by Small |
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New Exemption |
companies, namely:- |
Companies, in the Annual Return |
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filed with the Registrar of |
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“(g) aggregate amount of remuneration drawn by |
Companies. |
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directors;”. |
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4. |
Chapter VII, proviso to sub-section (1) of section |
Exemption/Adaptation: |
Exemption/Adaptation, to provide |
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92 (Annual Return) |
For the proviso, the following proviso shall be substituted, |
that in case of a Start-up Private |
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Company, the annual return shall |
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New Exemption/Adaptation. |
namely:- |
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Provided that in relation to One Person Company, small |
be signed by the CS, and if there is |
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no CS, then by the Director of the |
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company and private company (if such private company is |
Company. |
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a start-up), the annual return shall be signed by the |
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company secretary, or where there is no company |
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secretary, by the director of the company.”. |
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5. |
Chapter X, clause (i) of sub-section (3) of section |
Exemption: |
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Exemption to the Auditors |
with |
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143 (Powers and Duties of Auditors and |
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regard to disclosure in their report, |
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Auditing Standards)- Internal Financial |
Shall not apply to a private company:- |
as to presence of IFC, in Company, |
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Controls |
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in relation to (a) a OPC or a small |
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(i) which is a OPC or a small company; or |
company; or (b) Companies with |
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New Exemption |
(ii) which has turnover less than Rs. 50 Crores, as per Turnover less than Rs. 50 Crores, or |
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latest audited financial statement or which |
has Borrowings from banks or financial |
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aggregate borrowings from banks or financial institutions or any Body Corporate, |
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institutions or any body corporate at any point of time less than Rs.25 Crores. |
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during the financial year less than Rs.25 Crores.”. |
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6. |
Chapter XII, sub-section (5) of section 173 |
Exemption/Adaptation: |
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Exemption/Adaptation,with |
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(Meetings of the Board) |
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relation to a Start-up Company, to |
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For sub-section (5), the following sub-section shall be provide that holding of one |
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New Exemption/Adaptation. |
substituted, namely:- |
meeting of the Board of Directors |
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in each half of a calendar year, with |
- A One Person Company, small company, dormant e gap between the two meetings, company and a private company (if such private not less than 90 days, shall be in company is a start-up) shall be deemed to have compliance of Section 173. complied with the provisions of this section if at least
one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days:
Provided that nothing contained in this sub-section and
in section 174 shall apply to One Person Company in
which there is only one director on its Board of Directors
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7. |
Chapter XII, sub-section (3) of section |
Exemption: |
To provide for counting of the |
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174.(Quorum for meetings of the Board) |
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interest director for quorum, after |
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Shall apply with the exception that the interested |
the said interested director has |
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New Exemption |
director may also be counted towards quorum in such |
disclosed his interest as required |
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meeting after disclosure of his interest pursuant to |
under Section 184. |
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Section 184. |
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