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Amendments in Companies act for Private Limited Companies



Certainprovisions of the Companies Act, 2013, as specified in column (2) of the Table,shall not apply or shall apply with such exceptions, modifications andadaptations, as specified herebelow, to a private company, nameiy:-

 

Sections

Descriptions

Amendments

Effect of Change

Sub-clause (viii) of clause (76) of section 2

Meaning of Related Party

Shall not apply with respect to section 188.

If transaction is entered into between the Holding company and its Subsidiary Company or subsidiary of such subsidiary, than no need to pass special resolution irrespective of its paid up capital 

Section 43 and section 47.

Kinds of Share Capital and Voting Right

Shall not apply where Memorandum or articles of association of the private company so provides.

If MOA and AOA of Private Limited Company provides anything in respect to Said section, than these section shall not apply on Private Limited Company.

Sub-clause (i) of clause (a) of sub -section (l) and sub -section (2) of section 62

Further issue of share capital

Shall apply with following modifications:-

 

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 (2) of this section, in case ninety percent. of the members of a private company have given their consent in writing or in electronic mode, the periods lesser than those specified in the said sub-clause or sub-section shall apply

In case of further issue of shares, notice for the same needs to be send altleast three days before the opening of issue and the issue shall be open for minimum of 15 days and maximum of 30 days.

 

If Ninety of Shareholders agrees in writing to reduce such period, than such period shall apply.

Clause (b) of sub section (1) of section 62.

Further issue of share capital

In clause (b), for the words "special resolution", the words "ordinary resolution" shall be substituted

Shares may be issue to Employees under a scheme of employees’ stock option, by passing of ordinary resolution instead of special resolution.

section 67

Restrictions on purchase by company or giving of loans by it for

purchase of its shares.

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 any body corporate is less than twice its paid up share capital or fifty crore rupees, whichever is lower; and

 

(c) such a company is not in default in repayment of such borrowings subsisting at the time of making transactions under this section.

If Private Limited Company fulfills the following Conditions, it can give loan to other for purchase its own shares.

clauses (a) to (e) of sub-section (2) of section 73

Prohibition on acceptance of deposits from public.

Shall not apply to a private company which accepts from its members monies not exceeding one hundred per cent. 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

If a private limited company accept deposit within the limited as specified here, than the rigid provisions of clauses (a) to (e) of sub-section (2) of section 73 shall not apply.

sections 101 to 107 and section 109

Notice of Meeting, Statement to be annexed to notice, Quorum for meetings, Chairman of meetings, Proxies,  Restriction on voting rights Voting by show of hands, Demand for poll.

Shall apply unless otherwise specified in respective sections or the articles of the company provide otherwise.

Now a private company may have different provisions in its AOA for the following sections;

 

101-Notice of Meeting

 

102- Statement to be annexed to notice

 

103-Quorum of Meeting

 

104- Chairman of the Meeting

 

105- Proxies

 

106-Restraiction on voting rights

 

107- Voting by show of Hands

 

109- Demand of poll

clause (g) of sub-section (3) of section 117

Resolutions and agreements to be

Filed

Shall not apply

Requirement of Filling of resolution such as Filling of Balancesheet, Director Disclosure etc. in MGT 14 has been dispensed with.

Clause (g) of subsection (3) of section 141

Eligibility, qualifications and disqualifications of auditors.

Shall apply with the modification that the 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"

In Considering the limit of Twenty company for Statutory Auditor,  one person Companies, dormant companies, small companies and private companies having paid-up share capital less than one hundred crore rupees", shall not be counted

Section 160.

Right of persons other than retiring

directors to stand for directorship.

Shall not apply

Requirement of deposit of Rs. One lac has been dispensed with.

Section 162

Appointment of directors to be voted individually

Shall not apply

Now, a single resolution for the appointment of Two or more directors in AGM is valid.

section 180

Restrictions on powers of Board.

Shall not apply

Now there is no restrictions on powers of Board. Therefore no need to pass ‘special resolution for borrowing in excess of paid up capital etc..

sub-section (2) of section I 84

Disclosure of interest by director.

Shall apply with the exception that the interested director may participate in such meeting after disclosure of his interest

Now, the interested Director may participate in the Board meeting in which such interested transaction is discussed only after giving such transaction.

Section 185

Loan to

directors,

etc.

Shall not apply to a private Limited 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 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 making transactions under this section

Now the relaxation has been been given to private limited companies to give loan, guarantee as specified in section 185 to the extent provide in the amendments

second proviso to sub-section (l) of section 188.

Related party

transactions

Shall not apply

Now, the interested members of the company may vote on such special resolution,

to approve any contract or arrangement which may be entered into by the company, if such

member is a related party

sub-sections (4) and (5) of section 196

Appointment

of managing

director,

whole-time

director or

manager

Shall not apply

Now the appointment of the managing Director and the remuneration payable to be him may be approved in the Board meeting and no need to call general meeting for the purpose.

 

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