Exemption to Private Companies under Companies Act 2013

9:41 AM    

The corporate affairs ministry on Tuesday issued a draft notification that proposes some relaxation on the applicability of the Companies Act, 2013 on private companies. The ministry has proposed that certain sections related to appointment of key management personnel, appointment of whole-time directors and managing director, appointment of auditors, acceptance of deposits, voting rights, etc not to be made applicable to private companies in part or in whole. The ministry has asked for comments from the public on its draft notification till 1 July. It seems MCA is soon to be named as Most Confused Authority of India as it comes with this notification which is open for public comments till 1st July 2014. It was to come sooner or latter but the way Companies Act 2013 is being changed everyday, we have to wait and see the finally what it would shape into.





Some major exemptions proposed in draft notification are as follows 
  • MCA suggests restricting applicability of Companies Act, 2013 on private companies
  • MCA proposes - Sec 43 (Kinds of share capital) & Sec 47 (Voting Rights) not to apply to private companies
  • MCA proposes: Sec 62 (1) (a) & Sec 62 (2) (Further issue of share capital) to be modified for private companies
  • MCA proposes Sec 62 (1) (b) require 'ordinary resolution' for private companies
  • MCA proposes Sec 73 (2) conditions (relating to acceptance of Deposits) not be levied on private companies with 50 or less members
  • MCA proposes Sec 101-07 & 109 (relating to managment & admin) shall apply to private companies unless articles provide otherwise
  • MCA proposes Sec 141 (3)(g) shall not apply in w.r.t aptmnt of auditors by private companies.(Limit of 20 cos doesn't include pvt cos)
  • MCA proposes Sec 160 (directorships) & 162 (individual vote on appointment of directors) shall not apply to private companies
  • MCA proposes Sec 180 (Restrictions on powers of Board) shall not apply to private companies with 50 or less members
  • MCA proposes Section 185 (Loans to Directors, etc) not apply to certain category of private companies
  • MCA proposes Sec 188 (Related Party Transactions) not apply to private companies
  • MCA proposes Sec 196 (4) & (5) (appointment of MD, WTD) shall not apply to private companies
  • MCA proposes Sec 203 (3) (appointment of KMP) shall not apply to private companies
Read the draft notification here