21 November 2011
If the paid up capital of the company is Rs.10,00,000, reserve and serplus is Rs.25,00,000, Secured loans from banks are 15,00,000. Turnover is Rs.2,50,00,000. Unsecured loans are 51,00,000. wheather the CARO will be applicable to this company?
22 November 2011
Application: The CARO, 2003 applies to all companies including foreign companies as defined u/s 591 of the Companies Act, 1956 w.e.f. 1st day of July, 2003. Exceptions: The CARO does not apply to the following classes of companies- a. Banking company as defined u/s 5(c) of the Banking Regulation Act, 1949, b. Insurance company c. Company licensed to operate u/s 25 of the Companies Act, 1956 and d. Private limited companies subject to the following conditions- • Aggregate of paid up capital and reserves should not exceed ` 50 lakhs and • Loan outstanding from any bank or financial institution should not exceed ` 25 lakhs; and • Turnover should not exceed ` 5 crores. at any point of time during the financial year. Here, paid up capital means both equity and preference share capital. Reserves include all reserves including capital reserve.
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