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MCA Corporate Updates

Jaideep (Service) (1368 Points)

09 February 2011

Dear Friends

Please find attached file for following important corporate updates;

Schedule Xiii of the Companies Act 1956 Being Amended- Unlisted Companies Shall not Require Government Approval for Managerial Remuneration Where they have no Profits.

Directions Under Section 212 of the Companies Act 1956 Amended by Ministry of Corporate Affairs.

General Exemption Under Section 211 of the Companies Act 1956 Notified

Regards

Jaideep Pandya

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6 Replies

Soumyabrata (Company Secretary) (137 Points)
Replied 09 February 2011

Directions Under Section 212 of the Companies Act 1956 Amended by Ministry of Corporate Affairs has been published in the website www.mca.gov.in as General Circular No. 2/2011. But there is no Circular published as yet regarding Amendment in Schedule XIII and general expemption u/s 211 in the website. Please clarify.

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Simranjeet Singh (Proprietor at S Simranjeet & Associates Company Secretaries) (4396 Points)
Replied 09 February 2011

Thanks very much sir for sharing updates.........

keep updating........... keep sharing...........

Jaideep (Service) (1368 Points)
Replied 10 February 2011

True Soumya... But this circular will act as a amendment itself...moreover...we can say its a way provided after satisfying some requirement, Holding company is allowed to provide results as provided.

Regards

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CS Pooja (Company Secretary) (305 Points)
Replied 10 February 2011

Please clarify following in the context of amendment:

If the effective capital of the company is between Rs. 25 Crores to 50 Crores then according tot he earlier provisions we could pay the remuneration of Rs. 3 lacs per month without the permission of Central Government and to pay the remunration of above Rs. 3 lacs Central Govt. permission was required.

In the light of amended provisions can we pay the remuneration of more than Rs. 3 lacs without the permission of Central Government if the effectie capital of the company is between Rs. 25 Crores to 50 Crores?

Jaideep (Service) (1368 Points)
Replied 10 February 2011

Hi Pooja,

It is specifically provided in point no 2. of relevant notification,

In the case of unlisted companies so long as the conditions specified in Schedule XIII, including special resolution of shareholders and absence of default on payment to creditors, are fulfilled approval will not be needed hereafter.

and point no 3

Accordingly, Schedule XIII of the Companies Act 1956 is being amended to provide that unlisted companies (which are not subsidiaries of listed companies) shall not require Government approval for managerial remuneration in cases where they have no profits/ inadequate profits, provided they meet the other conditions stipulated in the Schedule.

So we can pay remuneration above 3 lacs in your case after following other conditions that is for special resolutions etc...

Thanks