Certain Exemptions to certain companies under the Companies Act 2013 – At a glance

S.2 (76)(viii)

Definition of 'Related Party' (viii) any company which is -

(A) Holding, subsidiary or associate company of such company; and

(B) A subsidiary of a holding company to which it is also a subsidiary

For the purpose of S. 188 [i.e. Related Party Transactions], this clause is not applicable

Any contract or arrangement with Hold Co / Sub Co / Associate Co /Fellow Sub Co not a related party transaction unless falls in any other criteria, such as common directors etc.

S. 43

Kinds of Share capital

Not Applicable if MoA or AoA so provides

S. 47

Voting rights

Not Applicable if MoA or AoA so provides

AoA can provide for no voting rights to Pref SH even in case of non-payment of dividend for 2 years or more

S.62(1)(a)(i)

Rights issue offer to be open for – NOT < 15 days & NOT > 30 days

If 90% of the members have given their consent in writing or in electronic mode, the shorter periods shall apply

S. 62(2)

ESOP, subject to Special Resolution

Substituted by 'Ordinary Resolution'

Now ESOP requires Ordinary Resolution, so no consequential filing in MGT 14

S. 67

Restriction on purchase of own shares or giving of loan by it for purchase of its own shares

Not applicable to a PRIVATE COMPANY :

(a) In whose share capital no body corporate has invested;

(b) If borrowings of such a company from banks or financial institutions or any body corporate is < twice its paid-up share capital or 
₹ 50 crore, whichever is lower, and

(c) Such a company is not in default in repayment of such borrowings subsisting at the time of making transactions under this section

S. 73(2)(a) to (e)

Acceptance of deposit from Members subject to certain conditions:

(a) Issue circular to members

(b) Filing Circular with RoC

(c) Depositing atleast 15% in DRR a/c

(d) Deposit insurance

(e) Providing security for repayment, if any

Conditions (a) to (e) not applicable to a PRIVATE COMPANY which accepts from its members monies not > 100% of aggregate of the paid up share capital and free reserves, and such company shall file the details of monies so accepted to the Registrar in such manner as may be specified

S. 101

Notice of GM

Applicable to a PRIVATE COMPANY unless:

1. Otherwise mentioned in the section; or
2. AoA of the Co provides otherwise

AOA of a PRIVATE COMPANY can provide for different norms

S. 102

Statement to be annexed to (GM) notice i.e. explanatory statement

S. 103

Quorum for (G)Ms

S. 104

Chairman of GMs

S. 105

Proxies

S. 106

Restriction on voting rights – in case of unpaid calls or right of lien

S. 107

Voting by show of hands

S. 109

Demand for poll

S. 117(3)(g)

Resolutions required to file with the RoC

PRIVATE COMPANY not required to file BRs passed u/s. 179(3)

PRIVATE COMPANY not required to file the following BRs in Form MGT 14 within 30 days of passing such BRs:

1. To make calls on shareholders in respect of money unpaid on their shares;
2. To authorise buy-back of securities under section 68;
3. To issue securities, including debentures, whether in or outside India;
4. To borrow monies;
5. To invest the funds of the company;
6. To grant loans or give guarantee or provide security in respect of loans;
7. To approve financial statement and the Board’s report;
8. To diversify the business of the company;
9. To approve amalgamation, merger or reconstruction;
10. To take over a company or acquire a controlling or substantial stake in another company;

R.8(1) to make political contributions;

R.8(2) to appoint or remove key managerial personnel (KMP);

R.8(4) to appoint internal auditors and secretarial auditor

S.141(3)(g)

Restrictions on No. of (statutory) audits

Following companies to be ignored while calculating the ceiling of 20 audits per person:

- OPC,

- Dormant companies,

- Small companies and

- Private companies having paid-up share capital < ₹ 100 crore

S. 160

Right of a person other than retiring directors to stand for directorships

Not applicable to a PRIVATE COMPANY

Notice from a member / such director along with a deposit of ₹ 1 lakh no more required for appointment at a GM

S. 162

Appointment of directors to be voted individually

Not applicable to a PRIVATE COMPANY

More than 1 director can be appointed by a single resolution

S. 180

Restrictions on powers of BoD: (a) to sell undertakng; (b) to invest compensation received as a result of amalgamation; (c) to borrow in excess of paid-up capital + free reserves; (d) to remit debt due from a director

Not applicable to a PRIVATE COMPANY

Special resolution for excess borrowings no more required to be passed and hence question of filing it will not arise. However if special resolution is passed for whatever reason, then filing it with RoC will be necessary

S. 184(2)

Interest Director to disclose his interest, and not to participate

Interested Director in a PRIVATE COMPANY may participate after disclosure of his interest

Interested Director in a PRIVATE COMPANY may participate after disclosure of his interest

But, interested director cannot be counted for quorum u/s. 174!

S. 185

Loan to Directors, etc.

Not applicable to a PRIVATE COMPANY:

1. In whose share capital no other body corporate has investedmoney;
2. if the borrowing of such a company from banks or financial institutions or any body corporate is < twice of its paid-up share capital or ₹  50 crore, whichever is lower; and
3. Such company has no subsisting default in repayment of such borrowings subsisting at the time of making transaction under this section

S. 188(1) 2nd Proviso

Related Party Transactions

• Related Party Member not allowed to vote in Special Resolution, where required to be passed due to threshold limits being exceeded

Not Applicable to a PARIVATE COMPANY

Related Party who is a member can vote on such special resolution

Ss. 196(4) & (5)

Appointment of MD, WTD subject to S. 197 read with Sch V, -

• Subject to approval at next GM, and
• Subject to approval by CG where appt is at variance with Sch. V Return of appt to be filed

Not applicable to a PARIVATE COMPANY

Now appointment of MD / WTD / Manager of a PRIVATE COMPANY need not be in compliance with 
S. 197/Sch V

S. 2(24)

'Company Secretary' = qualified CS appointed for the purpose

Not applicable

Qualified CS not necessary

S. 2 (68)

'Private company' definition

Requirement of having 'minimum share capital' not applicable

If S. 8 Co is a pvt. Co. having share capital, then minim paid-up capital requirement of ₹  1 lac is not applicable

At present no minimum paid-up capital prescribed for any type of Co

S. 2 (71)

'Public company' definition

Requirement of having 'minimum share capital' not applicable

If S. 8 Co is a public co having share capital, then minimum paid-up capital requirement of ₹  1 lakh is not applicable

At present no minimum paid-up capital prescribed for any type of Co

S. 96(2)

AGM to be held during 9 am to 6 pm, not on a National Holiday at registered office or within the same city

Additional proviso inserted:

Provided further that the time, date and place of each AGM are decided upon before-hand by the BoD having regard to the directions, if any, given in this regard by the Co in its GM.

S. 101(1)

A General Meeting can be convened at 21 clear days' notice

21 days substituted by 14 days

General meeting requires only 14 clear days' notice.

S. 118

Provisions re: recording of minutes

Entire section not applicable, except:

Minutes may be recorded within 30 days of the conclusion of every meeting in case of companies where the AoA provide for confirmation of minutes by circulation

Amongst others,

- Secretarial Standards 1 (BM) and 2 (GM) NOT REQUIRED to be followed

S. 136(1)

A copy of the financial statements etc. which are to be laid before a company in its GM to be sent not < 21 days before the meeting

21 days substituted by 14 days

Documents along with GM notice can also be circulated not < 14 days (instead of 21 days) before the GM

S. 149(1) & 1st proviso thereto

Minimum directors (2 for Pvt Co & 3 for Public Co), Maximum directors 15 (Spl reso for > 15)

Not applicable

No need for special resolution if Co wants to appoint > 15 directors

Practically, AoA of a Co existing before commencement of Co Act 2013 restricts maximum directors to 12, so to alter AoA, special resolution + RD approval required

S. 149(4)

Independent Directors

Not applicable

Provisions relating to appointment, other provisions re: Independent Directors are not applicable

S. 149(5)

Requirement of ID to be complied within 1 year, by the Cos existing on 1st April 2014, where applicable

Not applicable

S. 149(6)

Who cannot be ID

Not applicable

S. 149(7)

Declaration about status by ID

Not applicable

S. 149(8)

Code of conduct - Sch IV for ID

Not applicable

S. 149(9)

Remuneration to ID

Not applicable

S. 149(10)

ID tenure for 5 years + next 5 years (subject to conditions)

Not applicable

S. 149(11)

2 consecutive terms for ID & 3 years' cooling period

Not applicable

S. 149(12)(i)

Liability of ID

Not applicable

S. 149(13)

Retirement of rotation not applicable to ID

Not applicable

S. 150

Database of ID

Not applicable

Proviso to S. 152(5)

In case of appt of ID at GM, Expl St to contain BoD’s opinion about ID fulfilling the conditions

Not applicable

S. 160

Provisions for person other than retiring director to stand for directorships

Not applicable to Cos whose AoA provide for election of directors by ballot

No need for a notice from a member or intending director along with ₹ 1 lakh deposit for seeking appt at GM

S. 165(1)

No. of directorships of a person in companies NOT > 20 (NOT >10 public)

Not applicable

Directorship in a S.8 Co not included in determining No. of directorships

S. 173(1)

1st BM within 30 days & gap between 2 BMs NOT > 120 days

Not applicable only to the extent that BoD to hold at least 1 BM in every 6 calendar months

S. 8 Co required to hold at least 1 BM in every 6 calendar months (instead of a calendar quarter). Consequently gap between 2 BMs can be > 120 days

S. 174(1)

Quorum for a BM: '¹/₃ or 2 whichever is higher'

In sub-section (1), '¹/₃ or 2 whichever is higher' is substituted by '8 members or 25% of total strength, whichever is less'

Following proviso added:

Provided that the quorum shall not be < 2 members

Quorum: 8 members or 25% of total strength, whichever is less, subject to minimum 2

S. 177(2)

Audit Committee to consist of atleast 3 directors with majority IDs

Omitted the following:

"With independent directors forming a majority"

No requirement of ID in Audit Committee, if Audit Committee provisions become applicable

S. 178

NRC & Stakeholder's relationship committee

Not applicable

No requirement to form NRC & Stakeholder's Relationship Committee

S. 179(3)(d)

Power to borrow

May be decided by circulation instead of BM

Circular resolution possible; no need to call for a BM to exercise these powers

S. 179(3)(e)

Power to invest the funds of the company

May be decided by circulation instead of BM

S. 179(3)(f)

Power to grant loans or give guarantee or provide security in respect of loans

May be decided by circulation instead of BM

S. 184(2)

Interested director to disclose interest, and not to participate

Applicable only if related party transaction exceeds ₹  1 lakh

Applicable only if RTP >  ₹ 1 lakh

S. 189

Register of contracts or arrangement in which directors are interested

Applicable only if related party transaction exceeds ₹ 1 lakh