Exemption to Private Companies u/s 462 of The Companies Act 2013 as per
Ministry of Corporate Affairs Notifications Dated 5th June, 2015 and 13th June,
2017
The Ministry of Corporate Affairs provided exemptions to the private companies from
certain provisions of the Companies Act 2013 on 5th June, 2013. Further, the Central
Government has amended the said notification and has given further exemptions to the
private companies as per Section 462 of the Companies Act 2013.
The details of Exemptions provided to the private companies as per Section 462 of the
Companies act, 2013 are tabulated below.
Serial Chapter/ Section number/
Exceptions/Modifications
Number Sub-section(s) in the
/ Adaptations
Companies Act, 2013
(1) (2) (3)
1. Chapter I, clause (40) of section 2 The proviso would apply as under:-
Provided that the financial statement, with
respect to One Person Company, small
company, dormant company and private
company (if such a private company)s a
start-up), may not include the cash flow
statement;
Explanation. - For the purposes of this Act,
the term 'start-up' or "start-up company"
means a private company incorporated
under the Companies Act, 2013 (18 of
20'l3) or the Companies Act, 1956 ('l of
1956) and recognised as start-up in
accordance with the notification issued by
the Department of Industrial Policy and
Promotion, Ministry of Commerce and
Industry."
1A Chapter I, Sub-clause (viii) of Shall not apply with respect to section 188.
clause
(76) of section 2
2. Chapter IV, section 43 and section Shall not apply where memorandum or
47, articles or association of the private
company so provides.
3. Chapter IV, sub clause (i) of clause Shall apply with following modifications:-
(a) of sub-section (1) and sub-
section (2) of section 62. In clause (a), in sub-clause
(i) the following proviso shall be inserted,
namely:-
Provided that notwithstanding anything
contained in this sub-clause and sub-section
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(2) of this section, in case ninety percent, of
the members of a private company have
given their consents in writing or in
electronic mode, the periods lesser than
those specified in the said sub-clause or
sub-section shall apply.
4. Chapter IV, clause (b) of sub- In clause (b), for the words "special
section (1) of section 62. resolution", the words "ordinary resolution"
shall be substituted.
5. Chapter IV, section 67. Shall not apply to private companies
(a) in whose share capital no other body
corporate has invested any money;
(b) if the borrowings of such a company
from banks or financial institutions or
anybody corporate is less than twice its
paid up share capital or fifty crore
rupees, whichever is lower; and
(c) such a company in not in default in
repayment of such borrowings
subsisting at the time of making
transactions under this section.
6. Chapter V, clauses (a) to (c) of Shall not apply to a private company which
sub- section (2) of section 73. accepts from its members monies not
exceeding one hundred percent of
aggregate of the paid up share capital and
free reserves, and such company shall file
the details of monies so accepted to the
Registrar in such manner as may be
specified.
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Shall not apply to a private company-
(A) which accepts from its members monies
not exceeding one hundred percent of
aggregate of paid up share capital, free
reserves and securities premium account; or
(B) which is a start-up, for five years from
the date of its incorporation; or
(C) which fulfils all of the following
conditions ; namely-
(a) which is not an associate or a subsidiary
company of any other company
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Substituted by Notification dated 13.06.2017
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(b) if the borrowings of such a company
from banks or financial institutions or any
body corporate is less than twice of its paid
up share capital or fifty crore rupees,
whichever is lower; and
(c) such a company has no default in
repayment of such borrowings subsisting at
the time of accepting deposits under this
section.
Provided that the company referred to in
Clause (A), (B) or (C) shall file the details of
monies accepted to the Registrar in such
manner as may be specified.
6A Chapter VII, clause (g) of sub- Shall apply to private companies which are
section (1) of section 92 small companies as under:-
(g) aggregate amount of remuneration
drawn by directors
6B Chapter VII, proviso to sub-section The proviso shall apply as under:-
(1) of section 92
Provided that in relation to One Person
Company, small company and a private
company(if such private company is a start-
up), the annual return shall be signed by
the company secretary, or where there is no
company secretary, by the director of the
company.
7. Chapter VII, sections 101 to 107 Shall apply unless otherwise specified in
and section 109. respective sections or the articles of the
company provide otherwise.
8. Chapter VII, clause (g) of sub- Shall not apply.
section (3) of section 117.
9. Chapter X, Clause (g) of sub- Shall apply with the modification that the
section (3) of section 141. words "other than one person companies,
dormant companies, small companies, and
private companies having paid-up share
capital less than one hundred crore rupees"
shall be inserted after the words "twenty
companies".
9A Chapter X, clause (i) of sub-section Shall not apply to a private company
(3) of section 143.
(i) which is a one person company; or a
small company; or
(ii) which has turnover less than rupees fifty
crores as per latest audited financial
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statement or which has aggregate
borrowings from banks or financial
institutions or any body corporate at any
point of time during the financial year less
than rupees twenty five crore;
10. Chapter XI, section 160. Shall not apply.
11. Chapter XI, section 162. Shall not apply.
11A Chapter XII, sub-section (5) of For subsection (5), the following subsection
section 173 shall be substituted:-
(5) A One Person Company, small company,
dormant company and a private company
(if such private company is a start-up) shall
be deemed to have complied with the
provisions of this section if at least one
meeting of the Board of Directors has been
conducted in each half of a calendar year
and the gap between the two meetings is
not less than ninety days.
Provided that nothing contained in this sub-
section and in section 174 shall apply to
One Person Company in which there is only
one Director on its Board of directors.
11B Chapter XII, sub-section (3) of Shall apply with the exception that the
section 174 interested director may also be counted
towards quorum in such meeting after
disclosure of his interest pursuant to section
184.
12. Chapter XII, section 180. Shall not apply.
13. Chapter XII, sub-section (2) of Shall apply with the exception that the
section 184. interested director may participate in such
meeting after disclosure of his interest.
14. Chapter XII, section 185. Shall not apply to a private company
(a) in whose share capital no other body
corporate has invested any money;
(b) if the borrowings of such a company
from banks or financial institutions or
anybody corporate is less than twice of
its paid up share capital or fifty crore
rupees, whichever is lower, and
(c) such a company has no default in
repayment of such borrowing subsisting
at the time of making transactions
under this section.
15. Chapter XII, second proviso to Shall not apply.
sub-section (1) of section 188.
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16. Chapter XIII, sub-sections (4) and Shall not apply.
(5) of section 196.
2. The private companies, while complying with such exceptions modifications and
adaptations, as specified in column (3) of the aforesaid Table, shall ensure that the
interests of their shareholders are protected.
2A. The exceptions, modifications and adaptations, provided in column (3) of the aforesaid
Table, shall be applicable to a private company which has not committed a default in
filing its financial statements under section 137 of the said Act or Annual Return under
section 92 of the said Act with the Registrar.
3. A copy of this Notification has been laid in draft before both Houses of Parliament as
required by sub-section (2) of Section 462 of the Companies Act 2013
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