Dear All Please resolve the query: A company having paid up of 200000 and reserve of Rs 2 crores..As per section 2 Caro is not applicable on Small Companies but applicable on companies whose paid up capital and free reserves exceeds Rs 1 crore.. But since under the definition of small company only Paid up capital of rs 5000000 is covered. Should CARO be applicable on the company??
6 Replies
Varun Sharma
(Proprietor-Sharma Varun & Co.)
(244 Points)
Replied 13 July 2016
Dear All,
I beg to deffer here, I agree that being a small company it gets exemption from CARO, 2016. However, as per sub clause (v) of clause 2 of the order, it gets covered in CARO, 2016, wherein three specific conditions for coverage has been mentioned.
I am open for a discussion here.
Abhishek Singh
(Chartered Accountant)
(155 Points)
Replied 14 July 2016
Exactly.. That is also my view. But I had discussed this thing with various CA's and company law experts, they are also of the view that CARO is not applicable on the same.
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