Exemptions to Private Companies under section 462 of CA 2013 - F. No. 1/1/2014-CL.V - Companies Law

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] Government of India Ministry of Corporate Affairs Notification New Delhi Dated the 05 th June, 2015 G.S.R. 464 (E). - In exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of section 462 and in pursuance of sub-section (2) of said section of the Companies Act, 2013 (18 of 2013) , the Central Government, in the interest of public, hereby directs that certain provisions of the Companies Act, 2013, as specified in column (2) of the Table, shall not apply or shall apply with such exceptions, modifications and adaptations, as specified in column (3) of the said Table, to a private company, namely:- Serial number Chapter/ Section number/ Sub- section(s) in the Companies Act, 2013 Exceptions/ Modifications /Adaptations (1) (2) (3) 2 [1 Chapter I, clause (40) of section 2. For the proviso, the following shall be substituted, namely:- Provided that the financial statement, with respect to one person company, small company, dormant company and private company (if such private company is a start-up) may not include the cash flow statement; 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.] 1 [1A] Chapter I , sub-clause (viii) of clause 76 of section 2 . Shall not apply with respect to section 188 . 2 Chapter IV, section 43 and section 47 . Shall not apply where memorandum or articles of association of the private company so provides. 3 Chapter IV, sub-clause (1) of clause (a) of sub-section (1) and sub-section (2) of section 62 Shall apply with following modifications:- In clause (a), in sub-clause (i), the following proviso shall be inserted, namely:- Provided that notwithstanding anything contained in this sub-clause and sub-section (2) of this section, in case ninety per cent of the members of a private company have given their consent in -writing or in electronic mode, the periods lesser than those specified in the said sub-clause or sub-section shall apply. 4 Chapter IV , clause (b) of sub-section (1) of section 62. In clause (b), for the words special resolution , the words ordinary resolution shall be substituted 5. Chapter IV, section 67 . Shall not apply to private companies (a) in whose share capital no other body corporate has invested any money; (b) if the borrowings of such a company from banks or financial institutions or any body corporate is less than twice its paid up share capital or fifty crore rupees, whichever is lower; and (c) such a company is not in default in repayment of such borrowings subsisting at the time of making transactions under this section. 3 [6. Chapter V, clauses (a) to (e) of sub-section (2) of section 73. Shall not apply to a private company- (A) which accepts from its members monies not exceeding one hundred per cent. of aggregate of the paid up share capital, free reserves and securities premium account; or (B) which is a start-up, for five years from the date of its incorporation; or (C) which fulfils all of the following conditions, namely:- (a) which is not an associate or a subsidiary company of any other company; (b) if the borrowings of such a company from banks or financial institutions or any body corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is lower; and (c) such a company has not defaulted in the repayment of such borrowings subsisting at the time of accepting deposits under this section: 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.] 4 [6A. Chapter VII, clause (g) of sub- section (1) of section 92 Shall apply to private companies which are small companies, namely:- (g) aggregate amount of remuneration drawn by directors; . 6B. Chapter VII, proviso to sub-section of section 92 For the proviso, the following proviso shall be substituted, namely:- Provided that in relation to One Person Company, small 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.] 7. Chapter VII, sections 101 to 107 and section 109 . Shall apply unless otherwise specified in respective sections or the articles of the company provide otherwise. 8. Chapter VII , clause (g) of sub-section (3) of section 117. Shall not apply. 9. Chapter X, Clause (g) of sub-section (3) of section 141. Shall apply with the modification that the words other than one person companies, dormant companies, small companies and private companies having paid-up share capital less than one hundred crore rupees shall be inserted after the words twenty companies . 5 [9A. Chapter X, clause (i) of sub-section (3) of section 143 . Shall not apply to a private company:- (i) which is a one person company or a small company; or (ii) which has turnover less than rupees fifty crores as per latest audited financial 8 [ statement and ] which has aggregate borrowings from banks or financial institutions or any body corporate at any point of time during the financial year less than rupees twenty five crore.] 10. Chapter XI, section 160. Shall not apply. 11. Chapter XI, section 162 Shall not apply. 6 [11A. Chapter XII, sub-section (5) of section 173 For sub-section (5), the following sub-section shall be substituted, namely:- (5) A One Person Company, small company, dormant company and a private company (if such private company is a start-up) shall be deemed to have 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. 11B Chapter XII, sub-section (3) of section 174. Shall apply with the exception that the interested director may also be counted towards quorum in such meeting after disclosure of his interest pursuant to section 184 .] 12. Chapter XII , section 180. Shall not apply. 13. Chapter XII , sub-section (2) of section 184. Shall apply with the exception that the interested director may participate in such meeting after disclosure of his interest. 14. Chapter XII, section 185 . Shall not apply to a private company (a) in whose share capital no other body corporate has invested any money; (b) if the borrowings of such a company from banks or financial institutions or any body corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is lower; and (c) such a company has no default in repayment of such borrowings subsisting at the time of making transactions under this section 15. Chapter XII, second proviso to sub- section (1) of section 188. Shall not apply. 16. Chapter XIII, sub-sections (4) and (5) of section 196. Shall not apply. 2. The private companies, while complying with such exceptions, modifications and adaptations, as specified in column (3) of the aforesaid Table, shall ensure that the interests of their shareholders are protected. 7 [2A. The exceptions, modifications and adaptations provided in column (3) of the aforesaid Table shall be applicable to a private company which has not committed a default in filing its financial statements under section 137 of the said Act or annual return under section 92 of the said Act with the Registrar.] 3. A copy of this notification has been laid in draft before both Houses of Parliament as required by sub-section (2) of section 462 of the Companies Act., 2013. [F No. 1/1/2014-CL.V] Amardeep Singh Bhatia, Joint Secretary to the Government of India ------------------ Notes:- 1. Renumbered vide F. No. 1/1/2014-CL-V - Dated 13-6-2017 2. Inserted vide F. No. 1/1/2014-CL-V - Dated 13-6-2017 3. Substituted vide F. No. 1/1/2014-CL-V - Dated 13-6-2017 before it was read as, 6. Chapter V, clauses (a) to (e) of sub-section (2) of section 73 Shall not apply to a private company which accepts from its members monies not exceeding one hundred per cent. of aggregate of the paid up share capital and free reserves, and such company shall file the details of monies so accepted to the Registrar in such manner as may be specified. 4. Inserted vide F. No. 1/1/2014-CL-V - Dated 13-6-2017 5. Inserted vide F. No. 1/1/2014-CL-V - Dated 13-6-2017 6. Inserted vide F. No. 1/1/2014-CL-V - Dated 13-6-2017 7. Inserted vide F. No. 1/1/2014-CL-V - Dated 13-6-2017 8. Also see corregendum F.No.1/1/2014-CL-V - Dated 13-7-2017 , before it was read as, statement or'