Exemptions for
Private Limited Companies
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Although
a couple of privileges enjoyed by the private companies under the Companies act
1956 have been withdrawn the following privileges are still available for private
companies.
Section
|
Particulars
|
3
|
Number of Members:
Minimum – 2
 Maximum
200 |
43
|
Share capital of a company can be of any
kind if the memorandum or articles of association of the private company so
provides.
|
47
|
The voting right of the shareholders need
not be as per the act if the memorandum or articles of association of the
company so provides.
|
62 (1)(a) and 62(2)
|
For further issue of shares capital a letter of
offer shall be sent to the members specifying the number of shares offered
and limiting a time not being less than seven days not exceeding fifteen days
from the date of offer within which the offer if not accepted shall be deemed
to have been declined.
|
62 (1) (b)
|
On passing an ordinary resolution instead of
special resolution, shares can be issued to employees under a scheme of
employees’ stock option.
|
Sec 67
|
There is no restriction for a private company to purchase
its own shares if:
-
No other
body corporate has invested any money in that share capital
-
If borrowings
from banks or financial institution or body corporate is less than twice its
paid up share capital or fifty crore rupees which ever is lower and
-
Such
company is not in default in repayment of such borrowings subsisting at the
time of making transactions under this section
|
73 (2)
|
Restriction on acceptance of deposits from members shall not
apply to a private company having 50 or less members if moneys accepted from
members is:
not exceeding 25% of
aggregate paid up capital and free reserves
or
|
101 to 107 and 109
|
the following sections
shall not apply to a private company if the articles otherwise specify:
101 – 107 Notice and explanatory statement for the
general meeting, quorum for the meeting, chairman of the meeting, proxies,
restriction on voting rights, voting by show of hands
109 – demand for poll
|
103
|
Quorum for the meeting: 2 members personally
present
|
117 (3)(g)
|
Resolutions passed under section 179(3) need
not be filed with the MCA by a private company.
Section 179 (3): certain powers to be exercised by the board only at the board meeting
|
131
|
Board’s
report:
The private company is exempted from providing the following
information in the board’s report:
- Declaration from
independent directors on annual basis
- Composition of audit
committee
- Report details of establishment of vigil mechanism
- Directors’ Responsibility Statement:
o Declaration by the directors on the adoption and
functioning of adequate internal financial controls by the company
-
- Annual Return
o Secretarial Audit Report
o Statement on the annual evaluation by the board
of its performance and that of its committees and its directors
o Cost audit report
o Ratio of remuneration to each director
o A report on corporate governance
|
141 (3)(g)
|
The restriction of the number of companies in which a person or
partner who is full time employment elsewhere or a person or a partner of a
firm holding appointment as its auditor, shall not be appointed or
reappointed in more than 20 companies
shall not apply to a private company
|
160
|
The restriction on the retiring director standing for
directorship is not applicable to a private company
|
162
|
A single resolution shall be passed for the
appointment of two or more persons as directors at the general meeting
|
180
|
Restriction on the powers of the board to carry
on the following transactions shall not apply to a private company whose:
- borrowings from banks or financial institutions
is not more than twice of their paid up capital or Rs. 50 crore whichever is
lower
And
- In whose share capital no other body corporate
has invested money
Transactions
(a) to sell, lease or
otherwise dispose of the whole or substantially the whole ofthe undertaking
of the company
(b)
to invest otherwise in trust securities the
amount of compensation receivedby it as a result of any merger or
amalgamation;
(c)
to borrow money, where the money to be borrowed,
together with the moneyalready borrowed by the company will exceed aggregate
of its paid-up share capitaland free reserves, apart from temporary loans
obtained from the company’s bankers inthe ordinary course of business
(d) to remit, or give time for the repayment of,
any debt due from a director
|
188
|
The restriction in carrying on a transaction
between the related parties is not applicable to a private limited company
|
196 (4) and (5)
|
The approval of the terms and conditions of
appointment of MD/ WTD by the shareholders and the activities done by them
before the appointment in the general meeting shall not apply to a private
company
|
203 (3)
|
There is no restriction on a whole-time key managerial personnel
holding office in more than oneCompany.
|
204
|
Secretarial Audit is not applicable to a
private limited company
|
Sanka Indrani, Company Secretary
Achuthan R, Company Secretary
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