Sec 185, 188, 20 AUDIT LIMIT WILL NOT APPLY TO PVT LTD CO:

Sec 185, 188, 20 AUDIT LIMIT WILL NOT APPLY TO PVT LTD CO: 

Achhe Din Ane wale Hai !!!!!!!!!!!! For PVT LTD COs

1) sec 185 Shall not apply to Private companies -

(a) which have borrowings from banks or financial institutions or any bodies corporate not more than twice of their paid up share capital or Rs. 50 crore, whichever is lower; and

(b) in whose share capital no other body corporate has invested any money”.

2) section 188 Shall not apply.

3) 

20 AUDIT LIMIT WILL NOT APPLY TO PVT LTD CO

4) Many other sec will not apply:see attachments 

ANALYSIS OF DRAFT EXEMPTIONS AVAILABLE TO PVT LTD CO

:ANALYSIS OF DRAFT EXEMPTIONS AVAILABLE TO PVT LTD CO

In a praiseworthy move , MCA finally brings today some relief for Private Companies in Companies Act 2013. Has issued a draft notification dated 24 June 2014 which will hopefully get passed by houses of parliament soon.

I have tried to analyse the details of notification in light of provisions of act.
Amongst other things notification importantly provides that :

1. Section 73 subsection 2 (which details conditions to be followed for deposit acceptance) Shall not apply to private companies having 50 or less number of members if they accept monies from their members not exceeding twenty five percent of aggregate of the paid up capital and free reserves or one hundred per cent of the paid up capital, whichever is more, and which inform the details of such monies to the Registrar in the prescribed manner.
In crux , taking unsecured loan from shareholders will be allowed without any hassle for Entity with 50 or less shareholders.

2. Sections 101 to 107 and 109 (detailing requirement of min.days notice , quorum , voting manner , proxy manner , chairman ,poll , etc. for meetings ) shall apply unless articles of the private company otherwise provides.
In crux , companies can alter AOA to suit their comfort on these sections.

3. Following section / clause shall not apply to Pvt. Company :

• Clause (g) of sub-section (3) of section 141 : which provides for disqualification of auditor if is in employment or holds audit of twenty companies ( A big relief for CAs & hence a CA can audit any no. of pvt. company)

• Section 160 : which provides notice & Rs.1lakh deposit requirement for proposing person other than retiring director for directorship

• Section 162 ; which provides for separate resolution for appointment of each director and not through single resolution

• Section 180 (for pvt.co. with 50 or less members) : which mandates boards to exercise few powers only with consent of company through special resolution (sell,lease,dispose assets Or invest Or Borrow ). Hence these transaction shall happen board resolution thereby avoiding co.special resolution and its filing with ROC.

• Section 185 : which placed restriction on giving any loan/guarantee to director or related parties

• Section 188 : which placed restriction on Related party transaction & required special resolution for same without interested parties voting for same.

• Section 196 sub section (4) and (5) : which provided for approving Appointment and remuneration of managing director, whole-time director or manager by board subject approval at general meeting . Also required CG approval if variance from Schedule V. Also provided for intimation to ROC in sixty.

• Section 203 sub section (3) : which provided that a whole-time key managerial personnel shall not hold office in more than one company except in its subsidiary company at the same time.Any decided changes for Pvt.co.clients can accordingly be kept on hold till notification get approved.

queries regarding compliance of section 74 of the CA 2013 regarding filing of statement of deposits existing as at 01.04.2014 in form DPT-4:

Dear Members,

Need your suggestion/views on few queries regarding compliance of section 74 of the CA 2013 regarding filing of statement of deposits existing as at 01.04.2014 in form DPT-4:

Query-1: If deposits existing as at 01.04.2014 have been repaid before 30.06.2014, whether they still need to be reported

ANS: YES

Query-2: If  deposits have been reported by the company in form DPT-4, and subsequently they are paid before 31.3., its repayment need to be reported to ROC. If yes, how will such reporting be done? If no, how will ROC keep a track for repayment of all such deposits?

ANS: Yes , Return of Allotment in Form DPT3 Is to be filed for 2014-15 onwards.

Query-3: If  shareholders from whom loans exist as at 01.04.2014 but after 01.04.2014 and before 30.06.14, such shareholder is appointed as director whether it will still fall under the definition of deposit and will need to be reported in form DPT-4 or this will not be considered as deposit as loan from director is excluded from deposits?

ANS: Yes (as loan paid by director at the time when he is director is exempted deposits). However, planning should be to  repay existing loan & take fresh loan after appointing him as director.

Query-4: If the deposits from shareholders are taken over by/transferred to the directors, whether this will comply for exclusion from the definition of deposits which excludes “any amt received from a person who at the time of receipt of amount, was a director of the company”

ANS: No, as director is required to give declaration that loan to company is not out of loan or deposit.

Query-5: The deposit rules excludes from deposit, loan taken from promoters in stipulation imposed by the lending institution. Who all will be included as promoters for this purpose?

ANS:

Query-6: An auditor certificate needs to be attached with DPT-4 certifying the list of deposits, how will the auditor certify a deposit from director for exclusion and how will he certify that the funds are given by the directors out of his own funds?

ANS: Auditor will see whether director has furnished declaration or not. He can require further information too, if requires. 

RETURN OF ALLOTMENT IS TO BE FILED FROM NEXT YEAR IN “FORM DPT 3”( I.E. 2015)

RETURN OF ALLOTMENT IS TO BE FILED FROM NEXT YEAR IN “FORM DPT 3”( I.E. 2015)

10)a) Rule 16 of The Companies (Acceptance of Deposit) Rules, 2014 requires that every company to which these rules apply, shall on or before the 30^th day of June, of every year, file with the Registrar, a return in Form DPT-3 along with the fee as provided in Companies (Registration Offices and Fees) Rules, 2014 and furnish the information contained therein as on the 31^st day of March of that year duly audited by the auditor of the company.

b) Form DPT-3 will be filed as an attachment to Form GNL-2 (Circular No. 09/2014 dated 25.04.2014).

c) DPT-3 will be pre-certified by auditors of the company (Rule 12(b)(ii) of The Companies Registration Offices and Fees (Amendment) Rules, 2014)

d) The computation of Net Worth in Form DPT-3 requires data of latest audited balance sheet preceding the date of the return i.e. 31.03.2015.

e) This return of allotment will be filed from next year as relevant provision is applicable from 1^st April, 2014. 

interaction & your query on DPT:4 is expected to be solved.

Kindly see the interaction & your query on DPT:4 is expected to be solved.  

REQUIREMENTS OF SEC 74 & RULE 20

1) a) As per sec 74 of Co Act, 2013 & Rule 20 of the Companies (acceptance of deposit) Rules, 2014, If deposit or any interest remains unpaid on commencement of this Act, co. shall file, within 3 months (i.e. 30^th June, 2014), with ROC a statement in “Form DPT4”of all deposits accepted & sums remaining unpaid and Co shall repay the dues on or before 31.03.2015 or on due date of repayment, whichever is earlier.

b) Tribunal may, on application made by co., allow further time to repay the deposit.
c)  Penalties –

 i)  To Company – shall pay deposit and interest along with fine Rs. 1 crore to Rs. 10 crores and

 ii) To officer in default - Imprisonment upto 7 years or fine Rs. 25 Lakhs to Rs. 2 Crores, or both.

YES,  LOAN CAN BE TREATED AS DEPOSITS

2) Loan is covered under definition of deposits under Company Act, 2013 read with the Companies (acceptance of deposit) Rules, 2014.
3) Definition of the term “deposits” under Companies (acceptance of deposit) Rules, 2014, states the following:

a) If loan is received from any other company by any co., it is not covered as deposits.
b) If loan is received by any company (both Public & Pvt) from directors, it will not be covered as deposits provided director gives a declaration that loan is out of own fund(not by taking loan) . However, if loan is received from shareholders or director’s relative by any Co, these will be covered as deposits. 
c) If loan is received from other individuals by any company (both Public & Pvt), these will be covered as deposits.

d) any amount brought in by the promoters of the company by way of unsecured loan in pursuance of the stipulation of any lending financial institution or a bank  will not be treated as deposits subject to fulfillment of the following conditions, namely:-

(i) the loan is brought in pursuance of the stipulation imposed by the lending institutions on the promoters to contribute such finance;

(ii) the loan is provided by the promoters themselves or by their relatives or by both; and

(iii) the exemption under this sub-clause shall be available only till the loans of financial institution or bank are repaid and not thereafter;

4) A question arises, if any loan is received by a Co. from shareholder or director’s relative under Co Act, 1956, should we include these as deposit in Form DPT4 or not?
Answer: Yes, include these as deposits in Form DPT4.
Reasons:i) The meaning of the term “deposit” under sec 74 under Co Act, 2013 will be as per sec 2(34) of the Co Act, 2013. Hence, these will be included as deposits in Form DPT4.
ii) The intention of introduction of sec 74 is to repay all old deposits within one year time or extended time. MCA wants that all deposits accepted have to follow new Act & New Rules.
iii) This view can also be supplemented by the fact that legislature is giving enough time i.e. 1 year time to repay the deposits existing on 1st April, 2014 to comply with new Act & New Rules.
iv) ROC is expected to take this view .

HOW TO PREPARE & FILE DPT 4

CL Update 35: HOW  TO PREPARE & FILE  DPT 4 

HOW TO PREPARE & FILE DPT 4?5) Format of DPT4, Auditors Report & deposit list to be attached has been enclosed in excel format.

6) DPT4 is to be filed for F.Y. 2013-14, however, definition of deposits as per New Company Law is to be considered as sec 74 requires so.

7) Form DPT4 is an attachment Form .It is given in attachment category under download forms.

8) It will be attached with Form GNL 2(Form for submission of documents with the

Registrar). This will be filed in “return of deposit  category”  in point 3 of FORM GNL 3.  

9) Auditors report in will also be attached with this form.(Format has been Attached.)

MCA- INCORPORATION OF COMPANY

How to Incorporate a new private limited company: complete process

*Incorporating a new private limited company*

*INC-1 (Name approval)*

1.)    DIN and DSC of the proposed directors

a.       For DIN

                                                               i.      DSC

1.       PAN card copy attested by Bank

2.       Address Proof copy attested by bank

3.       Filled up form

                                                             ii.      Attested
PAN card copy

                                                           iii.      Attested
copy of Passport / Driver's License / Aadhar / Election ID / Electricity /
Telephone not older than 1 month

                                                           iv.      Scanned
photograph of the applicant

                                                             v.      DIR-4
application filed by the applicant as a affidavit

2.)    6 proposed names in order of choice

3.)    Proposed activity to be undertaken in the company



*INC-7 (Incorporation of Company)*

1.)    Educational Qualification of all the proposed signatories to the
memorandum

2.)    Attested address proof of all the proposed signatories to the
memorandum

3.)    Duration of stay at the present address. If less than one year then
previous address also

4.)    Contact numbers of the proposed applicants

5.)    Proof of identity and Residence of applicants

6.)    Ratio of shares to be held by each applicant

7.)    CIN of companies in which the director is already a director /
promoter

8.)    Memorandum and Articles

a.       Last pages to be signed and written in his own handwriting by the
subscribers

9.)    Declaration by the professional involved in INC-8

10.)   Signed and attested INC-10

11.)   Affidavit in INC-9 by the promoters



*INC-22 (Registered Office)*

1.)    Proposed registered address of the company

2.)    Whether the address is

a.       Owned by the company (Proof of the same) *OR*

b.       Owned by Director and not taken on lease *OR*

c.       Taken on lease (Rent agreement along with Rent receipts) OR

d.       Owned by other but not taken on lease (Proof that the company is
allowed to use)

3.)    Proof of address (Telephone / Gas / Electricity / Mobile) not older
than 2 months

4.)    List of all companies registered at the same address



*DIR-12 (Appointment of Directors)*

1.)    Affidavit by each proposed director in INC-9 and DIR-2

Dhruv Seth | F.C.A., D.I.S.A. (ICAI) | Seth & Associates | Chartered
Accountants | 90, Pirpur Square, Narahi, Lucknow-226001 | Phone :-
0522-2288287 (o) , +91 9935522611 (m) | Website - www.sethspro.com


 *COMPANY LAW UPDATE 7:*All directors disqualifies if company not files
annual returns or audited financial statements for 3 years:Onus of annual
reports on directors

 Onus of annual reports on directors