MCA vide Notification No. G.S.R. ………(E) on Tuesday, 13th June, 2017 amended the previous notification no. G.S.R. 464(E) dt. 5th June, 2015 in respect of Exemptions to Private Companies. Vide said notification following exemptions have been granted:
- Proviso to Section 2(40): Exemption has been granted to private startup company also for preparation of cash flow statement. (previously it was only for one person, small & dormant companies)
- Clauses (a) to (e) of Section 73(2): not apply to private company which
- Accepts monies from members not exceeding 100% of (paid-up capital + Free Reserves + securities premium account); or
- Start-up company upto 5 yrs from date of incorporation; or
- Not associate or subsidiary of any other company, Borrowing is less than twice of paid up share capital or Rs. 50 cr. (w.e. Lower) and Not defaulted in repayment of said borrowings
- Section 92(1)(g): Disclosure of information relating to remuneration to directors & KMP in Annual Return, Private companies which are small companies are required to disclose only aggregate amount of remuneration drawn by directors.
- Proviso to Section 92(1): In addition to one person & small company, Annual return of Start-up Companies shall be signed by Company Secretary (CS), if no CS then by director.
- Section 143(3)(i): Disclosure in auditor’s report relating to internal financial control systems shall not apply to private company which is-
- One person or small company; or
- Turnover < Rs.50 crs.; or
- Borrowing during FY < Rs.25 crs.
- Section 173(5): In addition to one person, small company and dormant company, start-up company is also required to hold at least 1 meeting of the Board of Directors in each half of a calendar year and the gap between 2 meetings is not less than 90 days.
- Section 174(3): In case of Private Company, interested director may be counted in quorum after disclosure of interest as per Section 184.
Further, it has been stated that the said exceptions, modifications and adaptations shall be applicable to Private Company which has not defaulted in filing its financial statements u/s 137 & annual return u/s 92 of the Act.
The said notification can be accessed at the following link:ExemptionPrivateCompanies_13.06.2017