Applicability of CARO..? (Audit)

This query is : Resolved

( Author )
19 June 2009

As per the conditions of CARO,2003 for a private limited company:
A private limited company with a paid up capital and reserves not more than fifty lakh rupees and has not
accepted any public deposit and does not have loan outstanding ten lakh rupees or more from any bank
or financial institution and does not have a turnover exceeding five crore rupees.

My question is if only one or two and not all the three conditions are voilated then would CARO be applicable to such a company..?

In my case only Condition no.2 is fullfilled so what would be my position in respect of CARO..?

Manmohan

( Expert )
19 June 2009

In order to claim exemption form applicability of CARO all the three condition of Paragraph 2 should be satisfies :
(iv) a private limited company with a paid-up capital and reserves not more than rupees fifty lakh and which does not have outstanding loan exceeding rupees twenty five lakhs from any bank or financial institution and does not have a turnover exceeding rupees five crores at any point of time during the financial year.

see the use of word "AND", hence CARO shall be applicable to your company .

regards...!

Akshay B Ostwal

( Expert )
19 June 2009

Dear OM,

AS per the CARO order,

A Private Company Which Satisfies 3 conditions as mentioned :
1. paid up capital and reserves not more than Rs.50 Lacs and

2. which doesn’t have loan outstanding exceeding Rs.25 from any bank or Fin instn and

3. doesn’t have turnover of turnover of Rs.5 crores

at any point of time during the financial year,

is exempt from This Order

It means if any of the condition is not met then it would fall under the perview of CARO Order.