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SECTION
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EXEMPTION PROPOSED BY GLOBALCA TEAM
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EXEMPTION NOTIFIED BY MCA
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MAJOR IMPACT/
EFFECTS OF NOTIFICATION ON PRIVATE COMPANIES
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Section-73 (2) of
Chapter
V (Prohibition on Acceptance
of Deposits from Public)
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Exemption: Shall not Apply to Private Companies
provided - It has less than 50
members
and if they accept monies from their
members
not exceeding
25% of aggregate
of the paid- up capital and free reserves or 100 % of
the paid up capital, whichever is more
AND
Which
informs the detail of such
monies to the Registrar.
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Private Companies borrowing monies from members upto 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
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Private Companies may borrow from its members
without complying with the following conditions:
(i) Issuance
of circular and filing its copy with ROC
(ii)
Maintaining Deposit
Repayment Reserve
(iii) Providing
Deposit
Insurance
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Section 141 (3) (g)- Chapter X- Eligibility,
Qualifications, disqualifications of Auditor
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Whole Exemption-
Shall not apply in respect of appointment of
auditors by private companies.
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Text
of notification:-
“Other than OPC, Dormant, Small Companies and Private Companies
having paid up
capital
of less
than Rs. 100 Crores shall
be inserted
after 20
Companies.”
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Limit of 20
companies shall include only:
(i)
Public Companies
(ii)
Private Companies whose Paid up
capital is Rs. 100 Crore or more
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Section 180 of
Chapter XII
- Restriction on Powers
of Board
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Whole Exemption Shall
not apply to private
companies having equal to
or less than
50
members.
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This Section shall not apply to Private Companies
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Private Companies are allowed
to exercise the following powers without shareholder’s approval:-
(i)
Borrow any amount exceeding
paid-up capital & free reserves
(ii) Sell/lease/dispose off whole or substantially the whole of
the undertaking
(iii) Invest in trust securities the
amount of
compensation received
by
it
as a result of merger or amalgamation
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Section 185 of
Chapter
XII– Loans
to Directors
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Shall not
apply to private
companies-
having borrowings from
banks and financial institutions or anybody corporate
not more
than
twice of their paid-up
capital or Rs. 50
crore, whichever is lower
AND
whose share capital is devoid of any investment
by any other body corporate.
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This Section shall
apply only
to private Companies which has :-
1.
Body Corporate as its Shareholder
2. 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
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Problem of giving
loans/ guarantee/security by Group Companies is possible now.
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Section 188 of
Chapter XII
– Related Party Transaction
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Whole Exemption
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1. Does not include Holding,
Subsidiary, Associate Company and sister concern(subsidiary
of holding)
in the definition of Related Party
(Section – 2(76))
2. Member
although being related party to the concerned resolution
can still cast
his vote
at General Meeting.
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1. Transactions
between Holding
& Subsidiary companies
shall not be considered
as Related Party
transactions and they are not required
to comply with
the requirements of Section
-
188.
2. Now
in case
company enters into any contract/ arrangement with
a member who is related party,
that member can
still cast his vote in General meeting on the said resolution.
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Section 62 (1) (a)
& 62
(2) of
Chapter IV
(Further issue of
capital)
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Words “not being less than fifteen
days and not exceeding thirty
days” shall be substituted with “not being less
than seven days and not exceeding
fifteen days”
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Sending
of offer letter minimum 3 days period before opening of offer
AND
Minimum & maximum offer
period
of 15 & 30 days respectively
Can be reduced,
if 90%
member give
their consent in writing/electronic mode
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Where
there is any
emergency,
time limit can be reduced with the consent of shareholders
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Section 160
&
162 of
Chapter
XI
Section 160 – Right of persons other than retiring
directors
to stand for directorship Section 162 – Appointment of directors
to be voted individually
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Whole Exemption
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These Sections
shall not apply to Private Companies
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Section 160: Amount of Rs. 1
Lakh
need
not be deposited by the person
who has submitted his candidature to be
appointed as director before 14 days of the date
of General Meeting.
Section 162: More than
One director can be appointed by single resolution
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Section 101-107
& 109
of Chapter VII- Section 101 – Notice
of Meeting
Section
102- Statement to be annexed
to notice
Section
103- Quorum for meeting
Section 104
– Chairman of Meeting.
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Partial Exemption: These exemptions shall apply unless otherwise provided in the respective sections ;
OR
Unless Articles of Companies provide alternatives
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These Sections
shall not apply to Private Companies
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Now Private Companies may override the below mentioned provisions by
its articles:-
(i) Alter
the content &
length of notice
(ii) Reduce quorum below 2
(iii) Increase
the time limit of more than 48 hours
for depositing Proxy
form
before the date of meeting of the Company
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Section 43 of
Chapter
IV- Kinds of
Share Capital
Section 47-
Voting Rights.
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Whole Exemption
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Section - 43,
47 shall not apply where memorandum or articles of association of
the private company so provides
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Where
the
Memorandum
of Association or Articles of Association provides the Kinds
of share Capital (Section - 43)
and Voting Rights (Section
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47) otherwise than so prescribed, then provisions provided in Memorandum
of Association or
Articles
of Association shall
prevail.
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Section 196 (4) Section
196 (5) of Chapter
XIII– Appointment
of MD, Whole time Director or Manager.
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Whole Exemption
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This Section shall not apply to Private Companies
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Now Whole Time Director, Managing
Director or Manager can
be appointed by directors
on terms and conditions and remuneration as fixed by directors.
It does not require
any ratification
by
Shareholders in the General Meeting of Company and approval by the Central Government.
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