MCA vide notifications dated 13th June, 2017 has amended the exemption notifications u/s 462 dated 05th June, 2015 with respect to the following companies:
- Government Company
- Section 8 Company
- Private Company
New Exemptions, Modifications and Adaptations granted with respect to each class of companies through said notifications are as below:
GOVERNMENT COMPANY:
| S. No. | Provisions of the Act | Exceptions, Modifications and Adaptions |
| 1. | Annual general meeting. Section 96(2) | Modification in sec 96(2) The Annual General Meeting can be held at registered office of the company or such other place within the city, town or village in which the registered office of the company is situated or such other place as the Central Government may approve in his behalf. Earlier pursuant to modification notification issued under section 462 , a government company can hold an annual general meeting either at its registered office or such other place, as may be approved by the central government |
| 2. | Appointment of director. Section 152(6) & (7) | Exemption The requirement related to rotation of directors along with manner of filling vacancy arising due to retiring director shall not apply to:-
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| 3. | Compromise, Arrangements and Amalgamations. Sections 230 to 232 | Modification For the word “Tribunal” wherever it occurs, the word “Central Government” shall be substituted. |
Note: Now, a government company can only take advantage of all the exceptions, modifications and adaptions as notified u/s 462, if the said company has not committed any default in filing its financial statements under section 137 or annual return under section 92 of the Companies Act, 2013.
Click here to download the notification.
SECTION 8 COMPANY:
| S. No. | Provisions of the Act | Exceptions, Modifications and Adaptions |
| 1. | Company to have Board of Directors. Clause (b) and first proviso to sub-section (1) of section 149 | Exemption Now exemption is available only with respect to provisions related maximum number of directors and permission of shareholders for having director beyond 15, earlier the compliance of provision of minimum number of Directors was also available. |
| 2. | Loan and investment by company. Sub-section (7) of section 186. | Modification in sec 186(7) The provisions with respect to minimum rate of interest shall not apply to a company in which twenty-six per cent. or more of the paid-up share capital is held by the Central Government or one or more State Governments or both, in respect of loans provided by such company for funding Industrial Research and Development projects in furtherance of its objects as stated in its memorandum of association. |
Note: Now, a section 8 company can only take advantage of all the exceptions, modifications and adaptions as notified u/s 462, if the said company has not committed any default in filing its financial statements under section 137 or annual return under section 92 of the Companies Act, 2013.
Click here to download the notification.
PRIVATE COMPANY:
| S. No. | Provisions of the Act | Exceptions, Modifications and Adaptions |
| 1. | Definition of financial statement. Section 2(40) | Modification in proviso to sec 2(40) Exemption has been provided to one person company, small company, dormant company and private company (if such private company is a start-up) from including cash flow statement, as a part of financial statements Explanation. – For the purposes of this Act, the term ‘start-up’ or “start-up company” means a private company incorporated under the Companies Act, 2013 (18 of 2013) or the Companies Act, 1956 (1 of 1956) and recognized as start-up in accordance with the notification issued by the Department of lndustrial Policy and Promotion, Ministry of Commerce and Industry.”. |
| 2. | Prohibition on acceptance of deposits from public. Section 73(2) (a) to (e) | Exemption subject to The scope of exemption from complying with the provisions relating to manner of acceptance of deposits has been changed to include the following
Provided that the company referred to in clauses (A), (B) or (C) shall file the details of monies accepted to the Registrar in such manner as may be specified. |
| 3. | Annual return. Section 92(1)(g) | Modification in sec 92(1)(g) subject to For small companies, clause (g) read as:- “(g) aggregate amount of remuneration drawn by directors” Existing clause (g) “(g) remuneration of directors and key managerial personnel” |
| 4. | Annual return. Proviso to sub-section (1) of section 92 | Modification in proviso to sub-section (1) of section 92 In addition to One Person Company, small company, in case of a private company which is a start-up, the annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company |
| 5. | Powers and duties of auditors and auditing standards. Section 143(3)(i) | Exemption subject to The provisions relating to statement about internal financial controls system in the auditor’s report shall not apply to a private company:-
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| 6. | Meetings of Board. Section 173(5) | Modification in sec 173(5) A One Person Company, small company, dormant company and a private company (if such private company is a start-up) shall be deemed to have complied with the provisions of this section if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days: |
| 7. | Quorum for meetings of Board Section 174(3) | Exemption subject to Interested director may also be counted towards quorum in such meeting after disclosure of his interest pursuant to section 184. |
Note: Now, a private company can only take advantage of all the exceptions, modifications and adaptions as notified u/s 462, if the said company has not committed any default in filing its financial statements under section 137 or annual return under section 92 of the Companies Act, 2013.