Exemption to private limited company

Chapter 1, Sub-clause (viii) of clause (76) of section 2.

(A) a holding, subsidiary   or an associate company of such company;                         or

(B) a subsidiary of   a holding company   to

Holding, Subsidiary and Associate Company will not cover under Related Party for the purpose of section 188.

Note:- 

Although Holding company is excluded but Director (other than independent Director), KMP  of holding company or their relative are still included in definition of Related Party. (Section 2(76)(ix))

Language of Notification:

Shall not apply with respect to section 188.

Chapter IV, Section 43 and Section 47

Section 43- Kind of Capital

Section – 47 Voting Right

If anything else mentioned in MOA & AOA then MOA & AOA prevail over the section 43 and 47.

Language of Notification:

Shall not apply where MOA & AOA of the Private Company so provides.

Bare Act Language Earlier:

The offer of Right issue of shares shall be open for minimum 15 days not exceeding 30 days from the date of the offer within which offer made.

In case 90%, of the members   of   a     private company   have   given their consents in writing or in electronic mode then Offer Can Be Close Before 15 Days.

Note:- 

The time limits cannot be increased, they can only be reduced.

Language of Notification given at the end (S. No. 1)

Chapter IV, Section 62(1)(b):

Further Issue of Share Capital

For ESOP Special Resolution  Required.

Now for ESOP Ordinary Resolution is enough.

Language of Notification

The words “special resolution”, the words “ordinary resolution” shall be substituted.

Chapter IV- Section 67

Restrictions on purchase by company or giving of loans by it for purchase of its shares.

Language of Notification given at the end (S. No. 2)

Earlier Private Limited Company can accept deposits from the Member after follow up the procedure mention under Section 73.

Private Limited Company can accept deposit from the Members upto 100%of aggregate of the paid up share capital and free reserves without followings:

·  Issue Circular

·  File circular with ROC

· Maintain deposit  repayment reserve

· Provide deposit insurance

Language of Notification is given at the end (Point no. 3)

· 101- Notice of meeting.

· 102- Statement to be annexed to notice.

· 103- Section Quorum for meetings.

· 104- Chairman of meetings. 105- Proxies.

· 106- Restriction on voting rights.

· 107- Voting by show of hands.

· 109- Demand for poll.

If anything else mentioned in AOA then AOA prevail over the section 101-107 & 109.

Articles of A Private Company May Override Provisions Pertaining To

1.       Content & Length of Notice

2.       Explanatory Statement

3.       Quorum

4.       Chairman

5.       Proxies

6.       Restriction on Voting Rights

7.       Show of Hands & Poll

Language of Notification is given at the end (Point no. 4)

Chapter   VII- Section:117 (3)(g)

Earlier Provision:

Copy of Resolution passed in pursuance of sub-section (3) of Section 179 required to filing with ROC.

Now there is NO NEED TO FILE FORM MGT-14 for the purposes of resolutions passed u/s 179(3) read with rule 8 of Companies (Meeting of Board & its power) Rules, 2014

Language of Notification

Provisions of Section 117(3)(g) will not apply on Private Limited Company.

Now under the limit of 20 (Twenty) Companies following will not include:

·   one person   companies,

·   dormant companies,

·   small companies, and

·   Private Companies having paid-up share     capital   less   than     one hundred crore rupees”.

Limit of 20 Companies only Includes:-

1. Public Companies

2. Private Companies having paid up capital of Rs. 100 Crore or more

Candidature Not Required For Appointment of Director at General Meeting

Now there is no need to pass “Special Resolution” for the purposes of passing of Resolution mentioned under Section 180.

Example:

1. Borrow exceeding paid up capital & free reserves.

2. Sell/lease/dispose off undertaking

Now Interested directors can participate in the meeting and vote in the meeting after disclosure of his interest.

Note:-

 He Cannot be counted in Quorum (Section 174(3) explanation)

Loan to director are allowed for Private Limited Companies if its fulfill the below mentioned conditions:

1. Body Corporate should be Shareholder

2. Not borrowed money from Bank/ Financial Institution/ Body Corporate exceeding lower of the following:-

 i. Twice its Paid up capital

ii. Rs. 50  crore

3. No repayment default subsisting of such borrowings at time of giving loan

Note:

Giving of loans/ guarantee/securityto Group Companies now possible.

Language of Notification is given at the end (Point no. 5)

Bare Act Language Earlier:

No member of the company shall vote on such Resolutions, to approve any contract or arrangement which may be entered into by the Company, if such member is related party.

Now there is no need to Pass Resolution in General Meeting for appointment of Managerial Personnel and no need to file form MR-1.

Managerial Personnel can be appoint in Private limited Company without following:

1.  Shareholder’s Ratification in not required.

2.  Schedule V not applicable.

3.  MR-1 not required to be filed

4.  T&C of appointment, remuneration not        mandatory to be mentioned in resolution