Applicabilty of caro 2015`

This query is : Open

pritesh (Querist)
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06 August 2015 CAN ANYONE GUIDE ME TO MY FOLLOWING DOUBT :
Q. XYZ LTD A COMPANY COMES UNDER DEFINITION OF SMALL COMPANY WHICH IS EXEMPTED AS PER EXCEPTION NO. 4 TO APPLICABILTY OF CARO 2015 AS ISSUED BY MCA. HOWEVER SUCH COMPANY HAS PAID UP CAPITAL AND RESERVE EXCEEDING Rs.50,00,00 ANDD OUTSTANDING LOAN IS NIL AND DOES NOT HAVE ANY TURN OVER OF EXCEEDING Rs.5cr AT ANY POINT OF TIME DURING THE F.Y. . MY QUESTION IS WHETHER CARO 2015 WILL BE APPLICABLE TO XYZ COMPANY OR NOT ?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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07 August 2015 MCA passed an order Companies (Removal of Difficulties) Order, 2015 on 13th Feb, 2015 to amend the definition of ‘Small Company’ as a company (other than Public Company) whose paid up capital does not exceed Rs. 50 lacs and turnover as per last profit and loss account does not exceed Rs. 5 crores.

Therefore, now the conditions of paid up share capital and turnover have been made mutually dependent and to qualify as ‘small company’ both the conditions are required to be fulfilled instead of anyone of them

In your case condition of paid up share capital is not fulfilled hence XYZ company is not a small company.

pritesh

pritesh (Querist)
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07 August 2015 THAN YOU, MR. MITESH MEHTA FOR THE EXPLAINATION AND CLARIFICATION, BUT I AM STILL CONFUSED THAT WHETHER I SHOULD ASSUME SMALL COMPANY OR NOT.
BECAUSE MCA SAYS THAT :
The MCA has issued Companies (Auditor’s Report) Order,2015. It shall come into force on the date of its publication in the Official Gazette. [TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)] GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS Order New Delhi, the 10th April, 2015 S.O. __________ (E).- In exercise of the powers conferred by sub-section (11) of section 143 of the Companies Act, 2013 (18 of 2013 ) and in supersession of the Companies (Auditor’s Report) Order, 2003, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 480 (E), dated the 12(11 June, 2003, except as respects things done or omitted to be done before such supersession, the Central Government, after consultation with the Institute of Chartered Accountants of India, constituted under the Chartered Accountants Act, 1949 (38 of 1949), hereby makes the following Order, namely:-
1. Short title, application and commencement. – (1) This order may be called the Companies (Auditor’s Report) Order, 2015.
(2) It shall apply to every company including a foreign company as defined in clause (42) of section 2 of the Companies Act, 2013 (18 of 2013) [hereinafter referred to as the Companies Act], except – (i) a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(ii) an insurance company as defined under the Insurance Act,1938 (4 of 1938); (iii) a company licensed to operate under section 8 of the Companies Act;
(iv) a One Person Company as defined
under clause (62) of section 2 of the Companies Act and a small company as defined under clause (85) of section 2 of the Companies Act; and
(v) a private limited company with a paid up capital and reserves not more than rupees fifty lakh and which does not have loan outstanding exceeding rupees twenty five lakh from any bank or financial institution and does not have a turnover exceeding rupees five crore at any point of time during the financial year.
(3) It shall come into force on the date of its publication in the Official Gazette.
MY QUERY IS THAT XYZ LTD IS SATISFYING NO.(iv) EXEMPTION CRITERIA I.E SMALL COMPANY
BUT NO.(v) CRITERIA IS VIOLATED i.e CAPITAL AND FR IS > RS. 50 LAC (SAY RS. 60 LAC). SO I WANT TO KNOW THAT WHICH POINT PREFERENCE IS TO BE GIVEN I.E NO. (iv) OR NO. (v)

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