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Applicability of caro 2016

Abhishek Singh (Chartered Accountant) (155 Points)

09 July 2016

Dear All Please resolve the query: A company having paid up of 200000 and reserve of Rs 2 crores..As per section 2 Caro is not applicable on Small Companies but applicable on companies whose paid up capital and free reserves exceeds Rs 1 crore.. But since under the definition of small company only Paid up capital of rs 5000000 is covered. Should CARO be applicable on the company??

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6 Replies

Dikshit Kapoor (Article Assistant) (51 Points)
Replied 09 July 2016

Sir, not applicable.

Dikshit Kapoor (Article Assistant) (51 Points)
Replied 09 July 2016

Sir, not applicable.

Abhishek Singh (Chartered Accountant) (155 Points)
Replied 11 July 2016

ok..thanks..

Varun Sharma (Proprietor-Sharma Varun & Co.) (244 Points)
Replied 13 July 2016

Dear All,

I beg to deffer here, I agree that being a small company it gets exemption from CARO, 2016. However, as per sub clause (v) of clause 2 of the order, it gets covered in CARO, 2016, wherein three specific conditions for coverage has been mentioned.

I am open for a discussion here.

Abhishek Singh (Chartered Accountant) (155 Points)
Replied 14 July 2016

Exactly.. That is also my view. But I had discussed this thing with various CA's and company law experts, they are also of the view that CARO is not applicable on the same.