Ministry of Corporate Affairs
NOTICE INVITING COMMENTS FOR THE DRAFT NOTIFICATION UNDER SECTION 462 OF THE COMPANIES ACT, 2013 FOR PRIVATE COMPANIES
Dated: 24th June, 2014
Section 462(1) of the Companies Act, 2013 (Act) empowers the Central Government to direct, by notification, in the public interest, that any of the provisions of this Act shall not apply to such class or classes of companies, or shall apply to the class or classes of companies with such exceptions, modifications and adaptations as may be specified in the notification. The said draft notification is required to be laid before each House of Parliament in accordance with section 462(2) of the Act.
The proposed draft notification under section 462 of the Act in respect of exemptions, exceptions, modifications or adaptations from relevant provisions of the Act for private companies has been prepared and is available on the Ministry’s website at www.mca.gov.in. Suggestions/Comments on the proposed draft notification may be addressed/sent latest by 1st July, 2014 through email at exemptions@mca.gov.in. It is requested that the name, Telephone number and address of the sender should be indicated at the time of sending suggestions/comments.
(KMS Narayanan)
Assistant Director (Policy)
23387263
[DRAFT NOTIFICATION]
(FOR PUBLIC COMMENTS TILL 1ST JULY, 2014)
Placed on website of MCA; 24/06/2014
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 2014
G.S.R. ___ (E). – In exercise of the powers conferred by clauses (a) and (b) of subsection (1) of section 462 of the Companies Act, 2013 (18 of 2013), the Central Government hereby, in public interest, directs that the provisions of sections 43, 47, Clause (a) and (b) of sub-section (1) and sub-section (2) of section 62, 73, 101 to 107, 109, clause (g) of sub-section (3) of section 141, 160, 162, sub-sections (4) and (5) of section 196, section 180, section185, section 188, subsection (3) of section 203 of the Companies Act, 2013 shall apply to a private Company with the modifications set out below, a copy of this notification having been laid in draft before both Houses of Parliament as required by sub-section (2) of section 462 of the said Act, namely:-
| SN | Chapter/ Section number/ Sub-section(s) in the Companies Act, 2013 |
Exceptions/ Modifications /Adaptations |
| 1 | Chapter IV, section 43 and section 47 [Both whole] |
Shall not apply |
| 2 | Chapter IV, clause (a) of sub-section (1) of section 62) and sub-section (2) of section 62 | Shall apply with the following modification:-Words ‘not being less than fifteen days and not exceeding thirty days’ shall be substituted with ‘not being less than seven days and not exceeding fifteen days’ |
| 3 | Chapter IV, clause (b) of sub-section (1) of section 62 | Shall apply except that instead of special resolution, ordinary resolution would be required |
| 4 | Chapter V, sub-section (2) of section 73 | Shall not apply to private companies having 50 or less number of members if they accept monies from their members not exceeding twenty five per cent 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 |
| 5 | Chapter VII, sections 101 to 107 and section 109 [All whole] | Shall apply unless- otherwise specified in respective sections or
– unless articles of the private |
| 6 | Chapter X, Clause (g) of sub-section (3) of section 141 | Shall not apply in respect of appointment of auditors by private companies. |
| 7 | Chapter XI, section 160( Whole) | Shall not apply |
| 8 | Chapter XI, section 162 [Whole] | Shall not apply |
| 9 | Chapter XII, Section 180 | Shall not apply to private companies having 50 or less number of members |
| 10 | Chapter XII, section 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”. |
| 11 | Chapter XII, section 188 | Shall not apply. |
| 12 | Chapter XIII, section 196, sub-section (4) and sub- section (5) | Shall not apply |
| 13 | Chapter XIII, sub-section (3), section 203 | Shall not apply |
[F No 1/1 /2014-CL.V] Joint Secretary.
Fully agree with Mr Rajesh.
Rajesh you have nicely put up the question from a different angle for the government to wake up to reality and answer and make necessary reversal of
the oddities the corporate world is now facing because of the enactment of
an ugly law. One fails to understand the need to put aside the old companies act in the first place. What may have been necessary is a set of revision
in some limits here and there if at all and the need to step up vigilance by
one and all as true citizens of India instead of changing the well placed
existing law.
See the basic understanding and knowledge of ground reality of Lawmakers. They have made a Law that even a private company cannot take loans from relative of directors and shareholders. See the bankruptcy of their intelligence; they want all these company to repay loans before 31st march 2015. They indirectly wish all private companies to wind up / close the business. Can they make even a Largest Bank of India to pay all deposits in one year without taking further deposits? Leave aside the Bank, Can Government of India repay all loans (taken from various sources) in one year. See the penalty of Rs 1 crore to 10 crore if loans not paid before 31st Mar.2015 and also imprisonment up to seven years. They do not even know that In India 90% of private companies will not be having a capital of 1 crore and they are daring to impose a penalty of minimum 1 crore. They (Lawmakers) did not even consider that relatives and shareholders give loans to private company because they trust them more than Banks, more than government, get better interest, and are more comfortable with them. On the other side, private companies get such loans on reputation whenever required which help them to save on costs and grow business.
I want to ask a question to Law makers: My brother is director of a private company. I have given loans to his company at 15% per annum and getting interest on time. I feel safer than Bank and do not want to invest in stock market. Now what should I do with my money if I am repaid my loans given to company?
This Devil law has been enacted by earlier government. I hope and request new government to drop it and restore earlier situation.