( Querist )
17 December 2009
Hi everybody, currently I handling two private limited companies. As most of the provisions of companies Act not applicable for private limited companies. Please share list of important provision and Sections of the companies Act applicable for private limited companies. Since I am new in this area mostly I confuse regarding sections, whether it applicable for private limited companies or not.
Please share list of important provision and Sections of the companies Act applicable for private limited companies……….
( Expert )
17 December 2009
Instead of looking at the sections applicable for Private Limited companies, you can look at those sections which are not applicable to private limited company. The list is as under:
70(3) Statement in lieu of prospectus need not be delivered to the Registrar of Companies before allotting shares1.
77(2) Financial assistance can be given to any one for purchase of or subscribing for its own shares or shares in its holding company.
81(3)(a) Further shares can be issued without passing special resolution or obtaining Central Governmentâ€™s approval and without offering the same necessarily to existing shareholders1.
90(2) Provisions as to kinds of share capital (section 85), new issues of share capital to be only of two kinds (section 86), voting rights (section 87), and termination of disproportionate excessive voting rights in existing companies (section 89).
149(7) Business can be commenced immediately on incorporation without obtaining a certificate of commencement from Registrar of Companies1.
165(10) It is not necessary to hold a statutory meeting and to send statutory report to shareholders and file the same with Registrar of Companies.1
170(1) Articles of a private company may provide for regulations relating to general meetings without being subject to the provisions of sections 171 to 186.
198(1) Any amount of managerial remuneration can be paid and the same is not restricted to any particular proportion/ percentage of the net profits.
204(6) Private company can appoint a firm or body corporate to an office or place of profit under the company.
252(2) Private company need not have more than two directors.
255(1) A proportion of directors need not retire every year.
257(2) Statutory notice, etc., is not required for a person to stand for election as a director.
259 Central Governmentâ€™s sanction is not required to effect increase in the number of directors beyond 12 or the number fixed by articles of association.
263(1) In passing resolution for election of directors, all directors can be appointed by a single resolution.
264(3) Consent to act as director need not be filed with Registrar of Companies.
266(5) Restriction on appointment of advertisement of director as regards consent and qualification of shares does not apply.
268 Central Governmentâ€™s sanction is not required to modify provisions relating to appointment of managing, whole-time or non-rotational directors.
269(2) Central Governmentâ€™s sanction is not required for appointment of managing or whole-time director or manager.
275 to 278 Restrictive provisions regarding total number of directorships which any person may hold do not include directorships held in private companies which are not subsidiary of public company. Provision as to retiring age of directors does not apply.
292A Provision as to Audit Committee does not apply.
293(1) The restrictions on powers of board of directors do not apply.
295(2) Prohibition against loans to directors does not apply.
300(2) Prohibition against participation in board meetings by interested directors does not apply.
303(1) Date of birth of a director need not be entered in the register of directors.
309(9) No restriction on remuneration payable to directors.
310 Any change in remuneration of directors does not require Central Governmentâ€™s approval.
311 Any increase in the remuneration not being sitting fees beyond specified limit of directors on appointment or reappointment does not require Central Governmentâ€™s approval.
316(1) Number of companies of which one person may be appointed as a managing director.
317(4) Managing director not to be appointed for more than five years at a time.
349, 350 & 355 Provisions relating to method of determination of net profits and ascertainment of depreciation do not apply.
372A No restriction on making loans to other companies. No prohibition against purchase of shares, etc. in other companies.
388A Provision of sections 386 and 387, which restrict the number of companies of which a person can be appointed as manager, remuneration of the manager, etc. and also provisions of sections 269, 310, 311, 312 and 317, do not apply.
409(3) Central Government cannot exercise its power to prevent change in board of directors which is likely to affect the company prejudicially.
416(1) Persons can enter into contract on behalf of company as undisclosed principal and need not give intimation to the other directors.
Everything else is applicable to private limited company.