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EXEMPTIONS TO A PRIVATE LIMITED COMPANY
[Personal & Private Circulation bearing no opinion or advice]
S. No.Exemption and Interpretation SectionDate of Applicability
1.DEFINITION OF RELATED PARTY RELAXED WITH RESPECT TO
Related Party does not include Holding, Subsidiary, Associate
Company and sister concern (subsidiary of holding).
Transactions entered with them and falling under section 188
does not require compliance of section 188.
Note:Although Holding company is excluded but Director
(other than independent Director), KMP of holding company or
their relative are still included in definition of Related Party.
2(76)(viii) From 05.06.2015 till
2.TIME LIMITS IN RIGHT ISSUE CAN BE REDUCED:
Sending of offer letter minimum 3 days period before opening
ANDMinimum & maximum offer period of 15 & 30
days respectively. In case of emergency, the mentioned time
limits can be reduced with the consent of 90% of shareholders
give their consent in writing/electronic mode.
Note:The time limits cannot be increased, they can only be
62(2) From 05.06.2015 till
3.ACCEPTANCE OF DEPOSITS FROM MEMBERS MADE EASIER
FOR CERTAIN PRIVATE COMPANIES:
Private Companies borrowing monies from members up to
aggregate limit of paid-up share capital & free-reserves need
not require to comply with conditions mentioned in section
73(2)(a) to (e). However details of money so borrowed shall be
filed with ROC in manner as may be specified.
If Such Company borrows money from member then no need
· Issue Circular
· File circular with ROC
· Maintain Deposit repaymentreserve
· Provide deposit insurance
(a) to (e) From 05.06.2015 till
4.NO NEED TO FILE MGT-14 FOR BOARD RESOLUTIONS:
Any Board resolution mentioned in section 179 (3) read with
rule 8 of Companies (Meeting of Board & its power) Rules,
2014 is now not required to be filed with ROC.
Note:This will reduce compliance for the companies. But there
are certain resolutions which need to be filed with ROC. This is
not a blanket exemption.
117(3)(g) From 05.06.2015 till
ARTICLES OF A PRIVATE COMPANY MAY OVERRIDE
PROVISIONS PERTAINING TO:
1. Content & length of notice
2. Explanatory Statement
6. Restriction on voting rights
7. Show of hands & Poll
Private Company Cannot:
1. Reduce quorum below 2
(In re- Ram Villas Press Publication Pvt. Ltd- Kerala HC)
2. Increase time limit of 48 hours for depositing proxy
3. Reject a proxy form if it fails to comply with specific
requirement of AOA
4. Restrict voting right of a member other than restrictions
in section 106
101 to 107 &
109 From 05.06.2015 till
6.MAXIMUM NUMBER OF AUDIT IN CASE OF PRIVATE
Limit of 20 Companies only includes:-
1. Public Companies
2. Private Companies having paid up capital of Rs. 100 crore
141(3)(g) From 05.06.2015 till
7.CANDIDATURE NOT REQUIRED FOR APPOINTMENT OF
DIRECTOR AT GENERAL MEETING:
Amount of Rs. 1 lakh not required to be deposited at least 14
days before GM.160 From 05.06.2015 till
8.APPOINTMENT OF DIRECTORS NEED NOT TO BE VOTED
More than 1 director can be appointed via single resolution.
162 From 05.06.2015 till
9.RESTRICTIONS ON POWERS OF BOARD NOT TO APPLY:
Private Company can now without shareholder’s approval:1. Borrow exceeding paid up capital & free reserves.
2. Sell/lease/dispose of undertaking.180 From 05.06.2015 till
10.INTRESTED DIRECTOR CAN PARTICIPATE IN BOARD MEETING
AFTER DISCLOSURE OF INTEREST:
Interested Director can now participate in agenda in which he
Note:He Cannot be counted in Quorum (Section 174(3)
explanation).184 From 05.06.2015 till
14OMISSION OF REQUIREMENT OF MINIMUM SHARE CAPITAL:
No minimum paid up share capital is prescribed under the act
now. A Private limited can be formed with any paid up share
2(68) From 25.05.2015 till
15REMOVAL OF COMMON SEAL:
The requirement of common seal has been replaced with the
signature of directors.
9, 12, 22
and 46 From 25.05.2015 till
16LOAN FROM DIRECTOR OR HIS RELATIVES:
Loan is allowed from the director and its relative without any
limit subject to the Loan is given from his own funds.
73, 76From 15.09.2015 till
Disclaimer:This document contains the views and analysis of the author regarding the mentioned amendment Act
and it is for personal and private circulation and not bearing any opinion or advice.
B Com. (Hons.), FCA, LLB,
Alumnus Rajdhani College (DU)
Alumnus Law Centre 2, Law Faculty (DU)
For any query and feedback, please write to
LOANS/GUARANTEE/SECURITY CAN BE GIVEN TO DIRECTOR
AND PERSON IN WHOM HE IS INTERETED BY CERTAIN
A private Company which has:
1. No Body Corporate Shareholder
2. Not borrowed money from Bank/ Financial Institution/
Body Corporate exceeding lower of the following: i. Twice its Paid up capital
ii. Rs. 50 crore
3. No repayment default subsisting of such borrowings at
time of giving loan
Note:Giving loans/ guarantee/security to Group Companies
185 From 05.06.2015 till
12.RESTRICTION ON VOTING RIGHT IN GENERAL MEETING IN
CASE OF RELATED PARTY TRANSACTION NOT APPLICABLE:
Member although being related party to the concerned
resolution can still cast his vote at GM.
188(1) 2nd proviso From 05.06.2015 till
13.SHAREHOLDER’S RATIFICATION NOT REQUIRED FOR
APPOINTMENT OF MD/WTD:
1. Shareholder’s Ratification in not required.
2. Schedule V not applicable.
3. MR-1 not required to be filed
4. T&C of appointment, remuneration not mandatory to be
mentioned in Resolution.
196(4) &(5) From 05.06.2015 till