Snapshot on exemption notification for private companies

kavitha jain , Last updated: 23 June 2017
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EXEMPTION NOTIFICATION FOR PRIVATE COMPANIES

INTRODUCTION:

Previously, Ministry of Corporate Affairs by notification number G.S.R. 464(E) dated 5th June, 2015 has given several exemptions to Private Companies. MCA via notification number G.S.R. 583(E) dated 13th June, 2017 has added few more exemptions by amending the notification dated 5th June, 2015.

SNAPSHOT OF EXEMPTIONS:

Following are the amendments to the exemption notification dated 5th June, 2015 issued to Private Companies:

S.NO	Applicable section	Companies covered	Nature of exemption
1.	Section 2(41) - financial statement	One Person Company (OPC) Small Company Dormant Company Start-up Private Company* *'start-up' or "start-up company" means a private company incorporated under the Companies Act, 2013 or the Companies Act, 1956 and recognised as start-up in accordance with the notification issued by the DIPP and Ministry of Commerce and Industry."	Financial statement of these companies need not include cash flow statements.
2.	Section 73(2) clause (a) to (e)- Prohibition on acceptance of deposits from public	Private company Which has accepted monies from members not exceeding 100 % of PC+FR + SP (or) Start up for five years from date of incorporation (or) Any private company: Which is not an associate/subsidiary of any other company & Borrowings from Bank / Financial institution/ Body corporate <2 (Paid up capital) /50 Crore w.e.f & Not defaulted in repayment of borrowings at the time of acceptance	Compliance with following is exempted: Issuing circular to the members and filing of the copy of the circular along with the statement with ROC Depositing money in repayment reserve account Provision for deposit insurance Certification that the company has not committed default in repayment of deposit and payment of interest.
3.	Section 92(1)(g) - Annual return	Private companies which are small companies	Disclosure of aggregate amount of remuneration drawn by directors instead of disclosing the remuneration drawn by Directors and KMP.
4.	Section 92(1) - Annual return	Start-up Company	Annual return of the start-up company in addition to One Person Company and Private company can be signed by Company secretary where there is no Company secretary then by the director of the company.
5.	Section 143(3)(i)- Powers and duties of auditors and auditing standards	Private company - which is OPC or small company or turnover < Rs. 50 Cr (as per latest audited financial or which has aggregate borrowings < Rs. 25 Cr (from banks or financial institutions or body corporate at any point of time during the financial year)	The auditor's report need not state whether the company has adequate internal financial control systems in place and operating effectiveness of such control.
6.	Section 173(5)- Meetings of the Board	Start-up Company	Start-up Company in addition to One Person Company, small company and dormant Company it will be deemed as compliance 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.
7.	Section 174(3)- Quorum for meetings of Board	Private Company	Interested Director may be counted towards quorum in Board meetings after disclosure of his interest in accordance with Section 184 of the Act.