As we know there are a lot of limits under Companies Act, to compile all the applicability of different limits we, Umang J & Associates, have drafted one wholesome blog.
This will help all the practicing professionals and the present shareholders of a company to understand the applicability of various rules & limits. Thank us later.
CARO Applicability (Sec 143)
The order applies to all the companies except the following companies specifically excluded from its purview:
One person company
Small companies (Companies with paid up capital less than or equal to Rs 50 lakhs and with a last reported turnover which is less than or equal to Rs 2 crores)
Banking companies
Companies registered for charitable purposes
Insurance companies.
The following private companies are also exempt from the requirements of CARO, 2020: –
Gross receipts or revenue (including revenue from discontinuing operations) is less than or equal to Rs 10 crores.
Whose paid-up share capital plus reserves is less than or equal to Rs 1 crore as on the balance sheet data (i.e. usually at the end of the FY).
Not a holding or subsidiary of a public company.
Whose borrowings is less than or equal to Rs 1 crore at any time during the FY.
Internal Financial Control (Sec 134)
Auditor would need to report whether company has adequate Internal Financial Controls for all the companies except:
Small company
One person company
Private Company turnover less than Rs 50 Crores and borrowings less than Rs 25 crores.
Internal Audit (Sec-138)
Applicable to:
Every listed company
Every unlisted public company having:
· Paid up share capital of Rs 50 Crores or more; or
· Turnover (income) of Rs 200 Crores or more; or
· Outstanding loans or borrowings from banks or public financial institutions exceeding Rs 100 Crores more at any point of time during the preceding financial year; or
· Outstanding deposits of Rs 25 Crores or more at any point of time during the preceding financial year; and
Every private company having–
· Turnover of Rs 200 Crores or more during the preceding financial year; or
· Outstanding loans or borrowings from banks or public financial institutions exceeding Rs 100 Crores or more at any point of time during the preceding financial year.
Certification of Annual Return by a Company Secretary (Sec 92)
This is applicable to:
All Listed Companies
Any Company having:
· Paid-up share capital of Rs10 Crores or more or
· Turnover of Rs 50 Crores or more.
Corporate Social Responsibility (Sec 135)
Applicable to every company having:
Net worth of Rs 500 Crores or more or
Turnover of Rs 1000 Crores or more or
Net profit of Rs 5 Crores or More.
Appointment and Reappointment of Auditor (Sec 139)
Applicable to:
All listed company or
Every unlisted public company having paid up share capital of Rs 10 Crores or more.
All Private limited company having share capital of Rs 20 Crores or more or
Every Company which has borrowing from Financial Institutions, banks or public deposits of Rs 50 Crores or more.
Women Director (Sec 149)
Applicable to:
All listed company or
Every public company having:
· Paid up share capital of Rs 100 Crores or more.
· Turnover of Rs 300 Crores or more or
Independent Director (Sec 149)
Applicable to:
Every listed company
Every unlisted public company having–
· Paid up share capital of Rs 10 Crores or more or
· Turnover of Rs 100 Crores or more or
· Outstanding loans, debentures ad deposit exceeding Rs 50 Crores or more.
Audit Committee (Sec 177)
Applicable to:
Every listed company
Every unlisted public company having–
· Paid up share capital of Rs 10 Crores or more or
· Turnover of Rs 100 Crores or more or
· Outstanding loans, borrowings, debentures ad deposit exceeding Rs 50 Crores or more.
Nomination and Remuneration Committee (Sec 177)
Applicable to:
Every listed company
Every unlisted public company having–
· Paid up share capital of Rs 10 Crores or more or
· Turnover of Rs 100 Crores or more or
· Outstanding loans, borrowings, debentures ad deposit exceeding Rs 50 Crores or more.
Vigil Mechanism (Sec 177)
Applicable to:
Every listed company
Every Company accepting deposits from general public or
All companies which have borrowed money form banks and Public Financial Institutions above Rs 50 Crores or more.
Key Managerial Personnel (Sec 203)
Applicable to:
Every listed company
Every unlisted public company having paid up share capital of Rs 10 Crores
Wholetime Company Secretary (Sec 203)
Applicable to:
Every listed company
Every unlisted public company having paid up share capital of Rs 10 Crores or more or
All other Private Company having share capital of Rs 10 Crores or more
Secretarial Audit (Sec 204)
Applicable to:
Every listed company
Every unlisted public company having:
· Paid up share capital of Rs 50 Crores or more or
· Turnover of Rs 250 Crores or more
XBRL (MCA Circular:- 16/2012 dt. 06.07.2012)
Applicable to:
Every listed company and its subsidiary
Every company having
· Paid up share capital of Rs 5 Crores or more or
· Turnover of Rs 100 Crores or more or
Here, we have covered one of the most important limits of Companies Act.
We hope the above blog was helpful in enhancing your knowledge on the matter. In case of any queries feel free to get in touch with our team of experts.
Quote of the day:
“The two most important days in your life are the day you are born and the day you find out why.“
- Mark Twain
Regards
CA Umang Jain
+91-96323-32850
umang@caumang.com
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