The Ministry of Corporate Affairs has issued a draft notification which is being placed before both the Houses of Parliament to provide privileges and exemptions to Private Companies and to receive public comments till 1st July, 2014 in exercise of the powers conferred by subsection (2) of section 462 of the Companies Act, 2013, namely:
1. Chapter IV : Section 43 and 47 dealing with kinds of share capital and voting rights respectively.
2. Chapter IV : Clause (a) of sub-section (1) of Section 62 which deals with the time period for the Rights Issue and sub-section (2) of Section 62 which deals with the Employee Stock Options.
Words ‘not being less than fifteen days and not exceeding thirty days’ shall be substituted with ‘not being less than seven days and not exceeding fifteen days’
3. Chapter IV, clause (b) of sub-section (1) of section 62 Shall apply except that instead of special resolution, ordinary resolution would be required, which means that for Rights issue now ordinary resolution will suffice.
4. Chapter V, sub-section (2) of section 73 which deals with Prohibition on acceptance of Deposits shall not apply to private companies having 50 or less number of members if they accept monies from their members not exceeding twenty five per cent of aggregate of the paid up capital and free reserves or one hundred per cent of the paid up capital, whichever is more, and which inform the details of such monies to the Registrar in the prescribed manner.
5. Chapter VII, sections 101 to 107 dealing with the provision with respect to the General meetings and section 109, demand for poll shall apply unless
- otherwise specified in respective sections or
- unless articles of the private
company otherwise provide.
6. Chapter X, Clause (g) of sub-section (3) of section 141 Shall not apply in respect of
appointment of auditors by private companies.
7. Chapter XI, section 160 dealing with the rights of persons other than directors to satnd for directorships shall not apply.
8. Chapter XI, section 162 which deals with the Appointment of Directors to be voted individually shall not apply.
9. Chapter XII, Section 180 dealing with the restrictions on the powers of Board shall not apply to private companies having 50 or less number of members.
10. Chapter XII, section 185 dealing with the Loans to Directors shall not apply to Private
companies -
(a) which have borrowings from banks or financial institutions or any bodies corporate not more than twice of their paid up share capital or Rs. 50 crore,
whichever is lower; and
(b) in whose share capital no other body corporate has
invested any money”.
11. Chapter XII, section 188 dealing with Related Party Transactions shall not apply.
12. Chapter XIII, section 196, sub-section (4) and sub- section (5) which requires that the appointment of Managing Director, Whole time director or manager shall be subject to the approval of the members in the General Meeting shall not apply.
13. Chapter XIII, sub-section (3), section 203 which says that a Whole time Key Managerial Personnel shall not hold office in more than one company except in its subsidiary shall not apply.
The notification containing the above details can be accessed at the link given below.
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