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Amended aoa of private limited company

mangeshpradhan (CA Practice ) (182 Points)

24 September 2013

I want to know about how to draft & what to include in the new /amended format of AOA of private limited company? Since ROC insisting for new format. Old format has not been acceptd since 13.09.2013. Please tell about that.

CA Mangesh Pradhan

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4 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 24 September 2013

Definition of 'private company' given in Section 2(68) of Companies Act 2013 has come into force w.e.f. 12.9.2013. Main differences in the new definition are:

a) Max. number of members has been increased from 50 to 200

b) The clause stating that 'the company prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives' has been deleted in the new definition. As a result, now private companies are not allowed to accept deposits from its members and relatives of directors.

This is a significant change and will affect all private limited companies.

Further, Sec.4(1)(c) of the new Act provides for Object Clause of Memorandum of Association. It omits 'Other Objects'.

It seems ROCs have started asking companies to amend their MoA and AoA as per new provisions which have come into force from 12.9.2013. Circular from MCA on this is expected for clarification.

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Sneha (Company Secretary) (1594 Points)
Replied 24 September 2013

Private companies are not allowed to accept deposits from its members and relatives of directors ?? Sure ?? Any provision for the same ??

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 24 September 2013

Rule 2(b)(ix) of Companies (Acceptance of Deposits) Rules 1975 excludes from 'deposit':

¹¹[(ix)

any amount received from a person who, at the time of the receipt of the amount, was a director of the company or any amount received from a relative of a director or its member by a private company:

Provided that the director, relative of a director or member, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting from others;]

Hence if a member gives declaration as above, it will be excluded from definition of deposits for the time being.

Situation will be clear after the Act is fully implemented and notifications & circulars are issued in due course of time.