There are
two categories of Private Limited Company for compliances purpose:
A. Small
Company
B. Non-
Small Company
SMALL COMPANY:
Let’s
first discuss what is Small Company:
INTRODUCTION:
The concept of “Small Company” has
been introduced for the first time by the Companies Act, 2013. The Act
identifies some companies as small companies based on their capital and
turnover for the purpose of providing certain relief/exemptions to these
companies. Most of the exemptions provided to a small company are same as that
provided to a One Person Company.
DEFINITION:
Section
2(85) defines a Small Company as –
‘‘small company’’ means a company, other than a public company,—
‘‘small company’’ means a company, other than a public company,—
1.
Paid-Up
Share capital of which does not exceed fifty lakh rupees or such
higher amount as may be prescribed
AND
2.
Turnover
of which as per its last profit and loss account does not exceed two
crore rupees or such higher amount as may be prescribed:
Provided
that nothing in this Section shall apply to—
1.
a
holding company or a subsidiary company;
2.
a
company registered under Section 8; or
3.
a
company or body corporate governed by any special Act
SALIENT
FEATURES:
- Only a private company can be classified as a small company.
- Holding company, subsidiary company, charitable company and company governed by any Special Act cannot be classified as a small company.
- For a small company, both conditions to be fulfilled the paid up capital should not exceed Rs. 50 Lac or the turnover as per last statement of profit & loss should not exceed Rs. 2 Crore.
- The status of a company as “Small Company” may change from year to year. Thus the benefits which are available during a particular year may stand withdrawn in the next year and become available again in the subsequent year.
- For qualifying as a small company, it is enough if both the capital and turnover are less than prescribed limit It is not sufficient if only one of the requirement is met without meeting the other requirement.
EXAMPLES:
I. A Pvt.
Ltd. Is having turnover of Rs. 1.60 Crore and paid up Capital of Rs. 30 lac as
on 31.04.2014.
STATUS: SMALL COMPANY (Till Capital doesn’t
exceed 50 Lac during F. Y. 14-15)
II. A Pvt.
Ltd. Is having Turnover of Rs. 5 Crore and paid up Capital of Rs. 30 Lac on
31.04.2014.
STATUS: SMALL COMPANY upto 13th February,
2014 and NON SMALL COMPANY w.e.f. 13th February, 2015 (Because of MCA Circular dated: 13th February, 2015)
III. A
Pvt. Ltd. Is having Turnover of Rs. 1.60 Crore and paid up Capital of Rs. 80
Lac on 31.04.2014
STATUS: SMALL COMPANY upto 13th February,
2014 and NON SMALL COMPANY w.e.f. 13th February, 2015 (Because of MCA Circular dated: 13th February, 2015)
IV. A Pvt.
Ltd. Is having Turnover of Rs. 5 Crore and paid up Capital of Rs. 80 Lac on
31.04.2014
STATUS: NON SMALL COMPANY W.E.F. 1st April,
2014
RELIEFS/
BENEFITS AVAILABLE TO A SMALL COMPANY:-
|
S. No.
|
Section
|
Nature of compliance
|
Precaution to be taken
|
Remarks
|
|
1.
|
173(3)
|
No. of Board Meetings
|
Minimum two board meeting held
during every calendar year: In this case minimum gap between both meetings
must be at least 90 days.
If more
than two Board Meetings held during the year, then no requirement of minimum
time gap between the meetings
|
Documents required to be prepared
for Board Meeting:
AS
PER ANNEXURE –A BELOW
|
|
2.
|
96
|
General Meeting
Small
Company in addition to other meetings must hold one Annual General Meeting
every year.
|
Note:
♠ Time:
AGM shall be called during ‘Business Hour’.
♠ Day:
AGM should not be held on ‘National Holiday’.
♠ Place:
AGM shall be held at either
–
Registered office of company or
–
At some other place within the city, town or village in which registered
office of the Company is situates.
|
· Time gap between
two Annual General meeting must not more than 15 month; or
· Within
6 month from the end of financial year of company
|
|
3.
|
101
|
Notice of General Meeting
|
♠ There should be 21 clear
days notice for calling of General Meeting.
♠
Notice can be send by following modes:
–
Electronic mode or
–
Writing
♠
Process for sending of notice through email given in Rule 18 of Chapter VII.
|
Other Important Provision relating
to this is:
AS
PER ANNEXURE –B BELOW
|
|
4.
|
184(1)
|
MBP-1
♠ At
First Meeting of Board of Director:
Every
company shall take disclosure of interest of director from every director of
company at first meeting of Board of directors every year.
♠ At
the meeting whenever there is any change in Interest:
Wherever
there is any change in interest of director, the director will give MBP-1 to
Company at the board meeting held after such change.
|
Imp. Note:
IN
GENERAL PRACTICE
♠ If
director of a company deals in shares and there is frequent change in
Shareholding of Companies then there will be change in disclosure of interest
of director in every Meeting. Director will give MBP-1 before every
meeting.
♠ If
there is no change in interest of director then director will give declaration
of non change of share holding or directorship at every board
meeting, until there is no change.
|
*** As per section 179(3) every
declaration of interest of director to be filed e-form in MGT-14.
·♠ If
there is change in shareholding or directorship is required to be filed in
every Board Meeting.
|
|
5.
|
179(3)
|
MGT-14
In small
company there are many purposes where company is required to file MGT-14 with
ROC. Mandatory purpose are following:
|
Ø Resolution for disclosure
of Interest of director with ROC.
Ø
Resolution for Adoption of Balance sheet
Ø
Resolution for adoption of Director’s Report.
Most
Imp: In
case of Small Company- Company can hold “Single” Board Meeting
for all the above mentioned three resolutions.
|
EXAMPLE
AS
PER ANNEXURE –C BELOW
|
|
6.
|
AOC-1
|
Small Company is required to file
every year in e-form- AOC-1 “Statement containing salient features of
financial statement of Company
|
Company is required to file e-form
AOC-1 within 30 days from the date of AGM
|
|
|
7.
|
92
|
MGT-7
|
Company is required to file in
e-form MGT-7 “Annual Return” of Company
|
Company is required to file e-form
MGT-7 within 60 days from the date of AGM
|
|
8.
|
Note:
If Small
Company don’t pass any OTHER resolutions and don’t conduct any work for which
other forms are required to be filed by company with ROC then only above
mentioned three forms are mandatory for Small Company for a financial year
under Companies Act, 2013.
For
General awareness there are more than 50 resolutions under Companies Act,
2013 for which company are required to file form MGT-14 with ROC
|
|||
|
9.
|
92
|
Preparation of Annual Return
|
This year there are major changes
in formats of Annual Return and numerous in formations are to be complied and
disclosed in new form (MGT-7).
|
For F. Y. 2014-15 Annual Return
MGT-7 is of near 40 pages. Many disclosures and information are required to
fill under annual return. Preparation of Annual Return itself a big task
under Companies Act, 2013.
|
|
10.
|
134
|
Preparation of Director’s Report
|
Same like Annual Return format and
requirements of Director’s Report has also changed. Director’s Report will be
based on the transactions of the Company. Preparation of Director’s report is
not same for all the Companies. Therefore, preparation of Director’s report
is good exercise under Companies Act, 2013.
|
Section- 134 deals with
disclosures to be given in Director Report.
|
|
11.
|
145
|
Preparation of Auditor’s Report
|
There are lots of responsibilities
imposed on Auditor’s under Companies Act, 2013. Auditor has to check many
provisions of Companies Act, 2013 and Accounting standards for preparation of
Auditor’s Report. Companies Act, 2013 impose responsibilities on Auditor.
·
Under companies Act, 2013 auditor will be appointing for 5 financial years.
·
Every year in General Meeting shareholder will ratify the auditor.
·
In case of non- retification it will considered as casual vacancy of auditor
|
|
ANNEXURE-
A
Documents
required to be prepared for Board Meeting:
1.
Notice
of Meeting
2.
Agenda
of Meeting
3.
Attendance
sheet of Meeting
4.
Minutes
of Meeting
5.
Leave
of Absence, if any
6.
MBP-1
or Declaration if no change
7.
Certified
true copy of Resolution, if required to be filed
ANNEXURE-
B
1. Things
to be mention in the Notice:
- Place, Day, Date and
- Hour of Meeting
- A statement of the business be transacted as such meeting.
2. Notice
of Meeting given to:
- Every member of Company or legal representative of any deceased member or the assignee of an insolvent member
- The auditor of the Company
- To every director of Company.
3. Calling
on shorter notice:
General
Meeting (including Annual General Meeting) can be called on shorter notice, if:
- Consent is given in writing or
- By electronic mode
By not
less than 95% of member entitled to vote at such meeting
4. Auditor
to attend General Meeting:
a. All the
Notice and other Communications relating to General Meeting shall be forwarded
to the Auditor of the Company.
b. The
Auditor will attend all the General Meeting of the Company.
Exempted
Only
When
auditor will send letter for exemption from attendance in General Meeting to
Company and Company may grant leave to him for not attending the General
Meeting by passing resolution at the General Meeting.
c. If
auditor is not exempted by the Company then Auditor himself or his authorized
representative (who shall also be qualified to be an auditor) will attend the
general meeting and will be heard at such meeting on any part of the business
which concerns him as auditor.
Documents
required to be prepared for General Meeting:
1. Notice
of Meeting.
2.
Explanatory statement.
3. Minutes
of Meeting.
4.
Attendance sheet signed from Member, Directors & Auditor.
5. If
auditor are not present at the meeting then:
- Leave of absence from the auditor.
- Acceptance of Leave of absence from the auditor.
6. CTC of
resolution, if required to be filed.
ANNEXURE-
C
Example
i. If
Small company holds first Board meeting of financial year after finalization of
accounts e.g. in September, then:
- Company will take MBP-1 in that Board Meeting
- Adopt Balance Sheet and Director’s Report in same Board Meeting.
- File one MGT-14 for all three above mentioned resolution’s.
Most
Important terms:
- Business Hour: 9:00 a.m. to 6:00 p.m.
- National Holiday: A day declared as National Holiday by the Central Government.
- 21 Clear days: exclude both date of issue of notice and date of receipt of notice. In general 21 clear days mean 23 days.
- See more at:
http://taxguru.in/company-law/compliance-checklist-small-company-companies-act-2013.html#sthash.rquwddSi.dpuf
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