Applicability, Non-applicability of certain provisions of Companies Act, 2013 | NRS

Applicability, Non-applicability of certain provisions of Companies Act, 2013

Date posted: Wednesday 4 May 2016
Laws:Companies Act 2013

Sr. No.	Provision		Under Section of Companies Act, 2013		Applicable Rule	Applicability/ Non-applicability
1.	Cash Flow Statement		2(40)			The following companies need not prepare cashflow statement as a part of the financial statements: One Person Company, or Small Company*, or, Dormant Company
2.	Signing of Annual Return by a Company Secretary (“CS”) in practice		92(1)			For the following companies, a director may sign the Annual Return, where there is no CS One Person Company, or, Small Company*
3.	Certification of Annual Return by a CS in practice		92(2)		Rule 11(2) –The Companies (Management and Administration) Rules, 2014	The following companies shall get their annual returns certified by a CS in practice: All Listed Companies, or All companies with Paid-up Capital >= Rs.10 crores, or, All companies with turnover >= Rs. 50 crores
4.	Corporate Social Responsibility (“CSR”)		135(1)		Rule 3 – The Companies (Corporate Social Responsibility Policy) Rules, 2014	The following companies shall form a CSR Committee for formation, implementation and compliance of a CSR Policy: All companies***, that, during any financial year, have Networth >=Rs. 500 crores, or, Turnover >=Rs. 1000 crores or, Net profit >= Rs. 5 crores
5.	Internal Auditor		138(1)		Rule 13(1) – Companies (Accounts) Rules, 2014			The following companies are required to appoint an internal auditor: All Listed Companies All Unlisted Public Companies having, during the preceding financial year, Paid-up Share Capital >= Rs. 50 crores, or Turnover >= Rs. 200 crores, or Outstanding loans/ borrowings from banks/ public financial institutions >= Rs. 100 crores at any point of time, or Outstanding deposits >= Rs. 25 crores at any point of time All Private Companies having, during the preceding financial year, Turnover >= rs. 200 crores, or, Outstanding loans/ borrowings from banks/ public financial institutions >= Rs. 100 crores, at any point of time
6.	Appointment & reappointment of Auditor		139(2)		Rule 5 – Companies (Audit and Auditors) Rules, 2014			Certain companies shall not appoint or re-appoint: An individual as auditor for more than 1 term of 5 consecutive years; and An audit firm as auditor for more than 2 terms of 5 consecutive years. The Companies to which the above provision is not applicable are: One Person Company, or Small Company* The Companies to which the above provision is applicable are: All Listed Companies, or, All Unlisted Public Companies with Paid-up Share Capital >= Rs. 10 crores, or, All Private Limited Companies with Paid-up Share Capital >= Rs. 20 crores, or, All Companies with Paid-up Share Capital less than the threshold limit mentioned above, but having public borrowings from financial institutions, banks or public deposits >= Rs. 50 crores.
7.	Women Director		149(1)		Rule 3 – Companies (Appointment and Qualification of Directors) Rules, 2014			The following companies shall appoint atleast 1 woman director All Listed Companies, or, Other Public Companies having, Paid-up Share Capital >= Rs. 100 crores, or, Turnover >= Rs. 300 crores
8.	Auditors Committee, Nomination and Remuneration Committee		177(1), 178(1)		Rule 6 – Companies (Meetings of Board and its Powers) Rules, 2014			The following companies shall constitute an Audit Committee and a Nominaton and Remuneration Committee of the Board: All Listed Companies, or, All Public Companies, having Paid-up Share Capital >= Rs. 10 crores, or, Turnover >= Rs. 100 crores, or, In aggregate, outstanding loans, borrowings, debentures or deposits >= Rs. 50 crores.
9.	Vigil Mechanism		177(9)		Rule 7(1) – Companies (Meetings of Board and its Powers) Rules, 2014			The following companies shall establish a vigil mechanism for directors and employees to report genuine concerns and grievances: All Listed Companies, or, All Companies that accept deposits from public, or, All Companies which have borrowed money from banks and public financial institutions > Rs. 50 crores.
10.	Related Party Transactions		188		Rule 15(1) – Companies (Meetings of Board and its Powers) Rules, 2014				A consent of the Board of Directors by way of a resolution at the Board meeting is not required for a related party transaction, when Such transaction is entered into by the company in its ordinary course of business and Such a transaction happens on an arm’s length basis Prior approval by a special resolution is required to enter into a contract or arrangement with a related party: For a company is having a paid-up share capital >= Rs. 10 crores, or, For sale, purchase or supply of any goods or materials directly or through appointment of agents > 25% of the annual turnover, or, For selling or otherwise disposing of, or buying, property of any kind directly or through appointment of agents > 10% of net worth, or, For leasing of property of any kind > 10% of net worth or 10% of turnover, or, For availing or rendering of any services directly or through appointment of agents > 10% of net worth, or, For appointment to any office or place of profit in the company, its subsidiary company or associate company at a monthly remuneration > Rs. 2.5 lakhs, or, For underwriting the subscription of any securities or derivatives thereof of the company with a remuneration > 1% of the net worth
11.	Managing Director/ Whole Time Director, Key Managerial Personnel		203(1)		Rule 8 – Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014				The following companies are required to appoint a whole-time key managerial personnel, who may be a managing director, a CEO, a director or a CFO: All Listed Companies, or, All Public Companies having a Paid-Up Share Capital >= Rs. 10 crores
12.	Appointment of CS by a Company		203(1)		Rule 8A – Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014				The following companies are required to appoint a whole-time company secretary All Listed Companies, or, All Public Companies having a Paid-up Share Capital >= Rs. 10 crores, or, All Other Companies having a Paid-up Share Capital >= Rs. 5 crores
13.	Secretarial Audit		204(1)		Rule 9 – Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014				The following companies shall annex a secretarial audit report, given by a company secretary in practice, with its Board’s report: All Listed Companies, or, All Public Companies having a Paid-up Share Capital >= Rs. 50 crores, or, All Public Companies having a turnover >= Rs. 250 crores.
14.	Independent Director		204		Rule 4 – Companies (Appointment and Qualification of Directors) Rules, 2014				Every listed public company shall have at least 1/3rd of the total number of directors as independent directors The following companies shall have atleast 2 directors as independent directors: All Public Companies having Paid-up Share Capital >= Rs. 10 crores, or, All Public Companies having turnover >= Rs. 100 crores, or, All Public Companies which, in aggregate, have outstanding loans, debentures and deposits > Rs. 50 crores
15.	XBRL Filing			General Circular No. 16/2012 dated 6th July, 2012			The following companies shall file their Balance-sheet and Profit & Loss Account with the Ministry in XBRL Mode All Companies Listed with any Stock Exchange in India and their Indian Subsidiaries, or, All Companies having Paid-up Share Capital >= Rs. 5 crores, or, All Companies having turnover >= Rs. 100 crores. The following companies shall be exempted from filing their Balance-sheet and Profit & Loss Account in XBRL Mode, even if they fulfill the above criteria: Banking Companies Insurance Companies Power Companies Non-Banking Financial Companies
16.	CARO Reporting			Companies (Auditor’s Report) Order, 2016			The following companies need not follow the CARO: Banking Companies Insurance Companies Section 8 Companies One Person Companies* Small Companies** A Private Limited Company Having Paid-up Share Capital <= Rs. 1 crore, and Which does not have loan outstanding > Rs. 1 crore from any bank or financial institution, and, Which does not have a total revenue > Rs. 5 crores during the financial year.

Notes

*One Person Company means a company which has only one person as member.
**Small Company means a company,
1. other than public company,
2. whose paid-up share capital <= Rs. 50 lakhs, or a prescribed higher amount (such prescribed amount cannot be higher than Rs 5 crores),
3. whose turnover <= Rs. 2 crores, or a prescribed higher amount (such prescribed amount cannot be higher than Rs 20 crores), as per the last P&L Account.

This definition shall not apply to

a holding company or a subsidiary company,
a company registered under Section 8, or
a company or body corporate governed by any special Act.

***The Company includes its holding or subsidiary and a foreign company having its branch office or project office in India.

Tags: Companies Act 2013