21 June 2015

Chintan Patel ~Exemptions to Private Limited Companies as per recent MCA notification:

Exemptions to Private Limited Companies as per recent MCA notification:

1.       Holding, associate, subsidiary or fellow subsidiary will not be related party for the purpose of Section 188 (2(76)).

2.       Provision wrt Kind of share capital (Section 43) and voting rights (Section 47) will not apply if articles of private limited company so provides

3.       Number of companies in which auditors can be auditors (20 in number) will not be counted if paid up capital of private company is less than Rs.100 crores (Section 141)

4.       Section 101 to 107 and Section 109 will not apply (notice of general meeting, explanatory statement, proxies etc., which were exempt under Old Act also) if articles so provide

5.       Section 62 – minimum and maximum period for which rights issue should remain open will not be applicable if 90% of members give consent

6.       Section 62- ESOP can be given with Ordinary resolution instead of special resolution

7.       Board resolutions passed under Section 179 are not required to be filed with RoC in MGT 14

8.       Deposit of 1 lakh etc. is not required to be given (Section 160). Entire Section 160 is not applicable

9.       No need to have separate voting on the resolution for appointment of more than 1 director (Section 162)

10.   No approval of shareholders required for matters  under Section 180 (borrowing, security etc.)

11.   Interested director can participate if he/ she has disclosed his interest (Section 184)

12.   Section 185 (loan to director) will not apply if

·         no other body corporate has invested,

·         if borrowing from banks/ financial institution or any body corporate is less than twice paid-up capital or Rs.50 crores whichever is lower and

·         there is no default in repayment of such borrowing

13.   Related party can vote on the resolution (Section 188). Second Proviso will not be applicable

14.   No approval of shareholders etc. required for appointment of managerial personnel of private company and no return needs to be filed with RoC in this regard (Section 196 (4) and 196 (5) will not be applicable)

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