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    Exemptions To Private Limited Companies - 2017

    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)


    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


    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



    Companies Act, 2013 and Description of the

    may be, as per the Notification





    Section, under which the changes were proposed.

















    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













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



    Exemption to


    section 73 (Acceptance of deposits from its



    (a)  private  companies  which



    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,





    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



    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




    (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.







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


    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











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


    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.



    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




    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.”.








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



    Exemption to the Auditors





    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,




    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.”.











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





    (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


    • 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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    Chapter  XII,  sub-section  (3)  of  section


    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.






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