|Sr. No||Section||Compliances as per Companies act, 2013||Threshold limit for applicability|
|1||2(6)||Associate Company||In relation to another Company, means a company in which that other Company has a significant influence, but which is not a subsidiary Company of the Company having such influence and includes a joint venture Company.
1.”significant influence” means control of at least 20% of total voting power, or control of or participation in business decisions under an agreement;
2.”Joint venture” means a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
|2||2(40)||Preparation of Cash Flow Statement||Applicable to all Companies except:
1. One Person Company;
2. Small Company;
3. Dormant Company
|3||2(85)||Small Company||Small Company means any Company other than Public Company having:
1. Paid up Share Capital which does not exceed Rs.50 Lakhs or such higher amount as may be prescribed which shall not be more than Rs.10 crores ; AND
2. Turnover does not exceed Rs. 2 crores or such higher amount as may be prescribed as per profit and loss account for the immediately preceding financial year, which shall not be more than Rs.100 crores,
Provided that above shall not apply to—
i. a holding company or a subsidiary company;
ii. a company registered under section 8; or
iii. a company or body corporate governed by any special Act;
|4||73||Acceptance of Public Deposit||Any Public Company satisfying the following criteria is eligible to accept deposit from persons other than its members.
1. Having Net worth of Rs.100 crores or more, or,
2. Having Turnover of Rs.500 crores or more and
3. Having obtained prior consent of the members in General Meeting by means of a special resolution and also filed the same with the office of the Registrar of Companies (RoC) before making any invitation to the Public for acceptance of Deposits.
|5||90||Significant Beneficial Ownership (SBO)
|As per Section 90 (1) of the Act
Every individual (must be natural person), acting alone or together, or through one or more persons or trust, including a trust and persons resident outside India, holds beneficial interest of not less than 25 % or such other percentage as may be prescribed, in shares of the Company or right to exercise or actual exercising of significant influence or control over company as defined in sec 2(27) of the Act is required to make declaration to the Company in Form BEN-1.
However SBO Rules later prescribes the holding not less than 10% holding/ voting right/ right to participate in distributable dividend by any such person to be treated as SBO.
The Rule overrides the provisions of the Section 90which has prescribed the limit as not less than 25%.
Further the Rules also says in case of the natural person/ an individual is having control or significant influence even without holding single shares, still he will be considered as SBO and onus will be on such person to declare the same in Form BEN-1.
|Significant Beneficial Owner (SBO) Rules , 2018||As per Rule 2 of Companies (Significant Beneficial Owners) Rules 2018:
“Significant Beneficial Owner” in relation to a reporting company means an individual referred to sub-section (1) of section 90, acting alone or together, or through one or more persons or trust or possesses one or more of the following rights or entitlements in the reporting company:
(i) holds indirectly, or together with any direct holdings, not less than 10% of the shares;
(ii) holds indirectly, or together with any direct holdings, not less than 10% of the voting rights in the shares;
(iii) has right to receive or participate in not less than 10% of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings;
(iv) has right to exercise, or actually exercises, significant influence or control, in any manner other than through direct-holdings alone.
There are Explanation I to VI under the Rule which one need to review in length to determine SBO.
|7||92||Annual Return Certification by Practicing Company Secretary (Form MGT 8)
|Form MGT -8 is Certification by practicing Company Secretary which is mandated under Section 92 of the Act for following types of Companies:
1. All Listed Companies or
2. All Companies with:
(a) Paid up Capital of Rs.10 crores or more or
(b) Turnover of Rs.50 crores or more
|8||92||Annual Return to be Certified by PCS or CS (Form MGT 7)||Form MGT 7 is Annual Return which is applicable to all Companies and either CS of the Company or Company Secretary in practice to certify compliances of all the applicable provisions of the Companies Act 2013 by the Company in that financial year.
If a Company Secretary in Practice certifies the Annual Return otherwise than in conformity with the requirements of the section 92 or the rules made thereunder, he/ she shall be punishable with fine which shall not be less than INR 50,000 but which may extend to INR 5 Lac.
Note : The Central Government may prescribe abridged form of Annual Return for One Person Company, Small Company and such other class or classes of companies.
|9||108||E voting rights||Following typr of companies are mandated to provide e-voting facilities to its members:
1. Every listed company and
2. Every company having not less than 1000 members
A Nidhi, or an Enterprise or Institutional Investor referred to in Chapter XB or Chapter XC of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 is not required to provide the facility to vote by electronic means.
|10||133||Preparation of accounts as per Indian Accounting Standards (IND AS)||The Companies and their Auditors shall comply with the Ind AS in preparation of their Financial statements and audit, as per Rule 4 of the Companies (Indian Accounting Standards) Rules, 2015 in the following manner:
Companies other than NBFC:
The following companies and its holding, subsidiary, joint venture or associate company shall comply with the Ind AS for the accounting periods beginning on or after 1st April, 2016, with the comparatives for the periods ending on 31st March, 2016, or thereafter, namely:-
a) companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having Net worth of Rs.500 crore or more;
b) companies other than those covered by sub- clause (a) of clause (ii) and having net worth of Rs.500 crore or more;
c) holding, subsidiary, joint venture or associate companies of companies covered by (a) and (b) stated above as the case may be ;and
The following companies shall comply with the Indian Accounting Standards (Ind AS) for the accounting periods beginning on or after 1st April, 2017, with the comparatives for the periods pending on 31st March, 2017, or thereafter, namely:
a) companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of less than Rs. 500 crore;
b) companies other than those covered in clause (ii) sub-clause (a) of clause (iii), that is, unlisted companies having net worth of Rs. 250 Crores or more but less than Rs.500 Crores ormore;
c) holding, subsidiary, joint venture or associate companies of companies covered under clause (a) and (b) above, as the case maybe.
For NBFC Companies :
The following NBFCs shall comply with the Indian Accounting Standards (Ind AS) for accounting periods beginning on or after the 1st April, 2018, with comparatives for the periods ending on 31st March, 2018, or thereafter—
a) NBFCs having net worth of rupees five hundred crore or more;
b) holding, subsidiary, joint venture or associate companies of companies covered under item (A), other than those already covered under clauses (i), (ii) and (iii) of sub-rule (1) of rule 4.
The following NBFCs shall comply with the Indian Accounting Standards (Ind AS) for accounting periods beginning on or after the 1st April, 2019, with comparatives for the periods ending on 31st March, 2019, or thereafter—
a) NBFCs whose equity or debt securities are listed or in the process of listing on any stock exchange in India or outside India and having net worth less than rupees five hundred crore;
b) NBFCs, that are unlisted companies, having net worth of rupees two-hundred and fifty crore or more but less than rupees five hundred crore; and
c) holding, subsidiary, joint venture or associate companies of companies covered under item (A) or item (B) of sub-clause (b), other than those already covered in clauses (i), (ii) and (iii) of sub-rule (1) or item (B) of sub-clause (a) of clause (iv).
|11||134||Risk Management Policy||Applicable to all Companies
Directors of the Company are required to provide statement indicating development and implementation of a Risk Management Policy in its Board Report provided every year.
|12||134||Disclosure in the Board’s Report for manner of formal Annual Evaluation of Board of Directors, its Committees and of individual Director||Applicable to following class of companies :
1. Every Listed Companies;
2. Every Public Companies having paid up share capital of INR.25 crore or more at the end of preceding financial year.
Exemption: Government companies are exempted in case the Directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the company, or as the case may be, the State Government, as per own evaluation methodology.
|13||135||Corporate Social Responsibility (CSR)||CSR is applicable to every Company having:
1. Net Worth of INR 500 crores or more, or,
2. Turnover of INR 1000 crores or more, or,
3. Net Profit of INR.5 crores or more
during the immediately preceding financial year.
|14||137||Reporting of Balance Sheet in XBRL format (eXtensible Business Reporting Language)||Following types of Companies are mandated to report its annual financials in XBRL format with RoC
1. Listed with Stock Exchanges in India and their Indian Subsidiaries;
2. Having Paid up Capital of INR 5 Crores or more;
3. Having Turnover of INR 100 Crores or above;
4. Required to prepare their financial statements in accordance with Companies (Indian Accounting Standards) Rules 2015.
Further the companies mentioned above which have filed their financial statements once in XBRL shall continue to file it in XBRL even though later it may not fall under the class of companies specified therein in succeeding years.
Also the companies which have filed their financial statements under the erstwhile rules, namely the Companies (Filing of Documents and Forms in extensible Business Reporting Language) Rules, 2011, shall continue to file their financial statements and other documents though they do not fall under the class of companies specified therein.
That means once XBRL is always XBRL
|15||138||Appointment of Internal Auditor||Following type of Companies are mandated to appoint Internal Auditors :
1. Every Listed company;
2. Every unlisted public company having following limit during the preceding financial year –
a) Paid up share capital of INR.50 crores or more
b) Turnover of INR 200 crores or more
c) Outstanding loans or borrowings from banks or PFI exceeding INR.100 crores or more at any point of time
d) Outstanding deposits of INR 25 crores or more at any point of time
3. Every private limited company having following limit during the preceding financial year ––
• Turnover of INR.200 crores or more
• Outstanding loans or borrowings from banks or PFI exceeding INR 100 crores or more at any point of time
|16||139(2)||Rotation of Auditors||Following type of Companies shall not appoint or re-appoint—
(a) an individual as Auditor for more than one term of 5 (five) consecutive years; and
(b) an Audit firm as Auditor for more than two terms of 5 (five) consecutive years:
1. Every Listed Company;
2. All unlisted public Companies having paid up capital of INR 10 crores or more or
3.All Private Limited Company having paid up share capital of INR 50 crores or more;
4. All companies having paid up capital below threshold limit mentioned in (2) and (3) above, but having public borrowing from Financial Institutions, banks, or public deposits of INR 50 Crores or more
|17||143||CARO 2016 – Company Auditors Report Order (CARO) 2016||CARO 2016 to be complied with by following type of Companies:
1. All Listed Companies
2. All Public Companies
3. All Private Companies, if Paid up Capital + Reserve and Surplus exceeds INR.1 crore or Borrowing from Banks & Public Financial Institution exceeds INR 1crore at any point of time during the financial year or total revenue defined under Schedule III (including revenue from discontinuing operations) exceeds INR 10 crores
Company Auditors Report Order (CARO) 2020
|CARO 2020 has included additional reporting requirements in consultation with National Financial Reporting Authority (NFRA).
CARO 2020 shall be applicable for all the Statutory Audits commencing on or after 1 April 2019. It is applicable on all the Companies which were covered by CARO 2016, i.e.
1. All Listed Companies
2. All Public Companies
3. All Private Companies, if Paid up Capital + Reserve and Surplus exceeds INR.1 crore or Borrowing from Banks & Public Financial Institution exceeds INR.1crore at any point of time during the financial year or total revenue defined under Schedule III (including revenue from discontinuing operations) exceeds INR 10 crores
|18||143 (3)||Reporting of Internal Financial Control in Auditors Report
|All companies except private companies which is;
1. One Person Company;
2. Small Company;
3. Company having turnover of less than INR 50 crore as per the latest financial statement & aggregate borrowings from banks or financial institutions or anybody corporate at any point of time during the financial year is less than INR 25 crore.
|19||148||Maintenance of Cost Record and Cost Audit||COST RECORDS
Every Company engaged in the production of the goods or providing services, specified in Item A (Regulated Sectors) and Item B (Non-Regulated Sectors) of Rule 3 Companies (Cost Records and Audit), 2014 shall maintain the cost records in their books of accounts if, having an overall turnover from all its products and services of Rs.35 crore or more during the immediately preceding financial year.
Every Company specified in Item (A) of Rule 3 shall get its cost record audited if:
1. The overall annual turnover of the Company from all its products and services during immediately preceding FY is Rs.50 crores or more and
2. Aggregate turnover of the individual product(s) or service(s) for which cost records are required to be maintained is Rs.25 crores or more.
Every company specified in item (B) of Rule 3 shall get its cost record audited if:
1. The overall annual turnover of the Company from all its products and services during immediately preceding FY is Rs.100 crores or more and
2. Aggregate turnover of the individual product(s) or service(s) for which cost records are required to be maintained is Rs. 35 crores or more.
|20||149||Independent Directors||Every listed company shall have at least 1/3rd of the total number of directors as independent directors.
As per SEBI Listing Obligations and Disclosure Requirements (LODR), 2015
1. When Chairperson of the Company is an Executive Director, then the majority of the Directorsare required to be Independent Directors and
2. When Chairperson of the Company is a Non-Executive Director, atleast half of the Board shall consist of Independent Director.
Following companies shall have at least 2 directors as Independent Directors:
All Public Companies having:
1. Paid-up Share Capital of INR 10 crores or more, or
2. Turnover of INR.100 crores or more, or,
3. In aggregate, have outstanding loans, debentures and deposits of more than INR 50 crores
|21||149||Women Director||Following companies require to have one women director in its Board of Directors :
1. All Listed Companies;
2. All other Unlisted Public Companies having Paid up capital of INR 100 crore or more OR Turnover of INR 300 crore or more.
|22||177||Vigil Mechanism||Every following type of Companies need to have Vigil Mechanism
1. Every Listed Company and
2. Every other Companies which accepts deposits from public or have borrowed money from Banks and Public Financial Institution in excess of INR 50 Crores
|23||177||Audit Committee ( Public and Listed Companies)||Following type of Companies to have Audit Committee
1. Every Listed Public Company and
2. All Unlisted Public Companies having:
a. Paid-up Share Capital of INR 10 crores or more, or,
b. Turnover of INR 100 crores or more, or,
c. In aggregate, have outstanding loans, debentures and deposits of more than INR.50 crore
|24||178||Nomination & Remuneration Committee ( for Public and Listed Co) NRC
|Following type of Companies to have NRC
1. Every Listed Public Company and
2. All Unlisted Public Companies having:
a. paid-up Share Capital of INR 10 crores or more, or,
b. Turnover of INR. 100 crores or more, or,
c. In aggregate, have outstanding loans, debentures and deposits of more than INR 50 crore
Stakeholder Relationship Committee
|All such Companies having more than 1000 Shareholders, Debenture- holders, Deposit holders and any other Security holders at any time during a financial year.|
|26||186||Threshold limit of giving of Loans or making Investment by the Company||Section 186 mandates that
1) Investment can be made by the Company through not more than two layers of investment companies.
Company can directly or indirectly:
(a) give any loan to any person or other body corporate;
(b) give any guarantee or provide security in connection with a loan to any other body corporate or person; and
(c) acquire by way of subscription, purchase or otherwise, the securities of any other body corporate,
Upto 60% of its paid-up share capital, free reserves and securities premium account
Upto 100% of its free reserves and securities premium account,
whichever is more
|27||188||Related Party Transactions||Section 188 (1) states- that except with the consent of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party (defined under section 2 (76) with respect to—
(a) sale, purchase or supply of any goods or materials;
(b) selling or otherwise disposing of, or buying, property of any kind;
(c) leasing of property of any kind;
(d) availing or rendering of any services;
(e) appointment of any agent for purchase or sale of goods, materials, services or property;
(f) such related party’s appointment to any office or place of profit in the company, its subsidiary company or associate company; and
(g) underwriting the subscription of any securities or derivatives thereof, of the company.
However, no contracts or arrangements as mentioned in Section 188(1) shall be entered with any related party except with the prior approval of the Company by a resolution, if it exceeds thresholds limits mentioned below:
i) Sale, purchase or supply of any goods or materials, whether directly or through any agent, amounting to 10% or more of the turnover of the company;
ii) Selling or otherwise disposing of or buying property of any kind, directly or through any agent, amounting to 10% or more of the net worth of the company;
iii) Leasing of property of any kind, amounting to 10% or more of the turnover of the company;
iv) Availing and rendering of any services, directly or through appointment of agent, amounting to 10% or more of the turnover of the company;
v) Appointment to any office or place of profit in the Company, its subsidiary or Associate Company at a monthly remuneration exceeding Rs.2.5 Lakhs
vi) Remuneration for under writing the subscription of any security or derivatives thereof, of the Company exceeding 1 % of the net worth.
Further nothing mentioned in Section 188(1) shall apply to any transactions entered into by the company in its ordinary course of business other than transactions which are not on an arm’s length basis.
In case of Wholly Owned Subsidiary (WOS) the resolution passed by the Holding Company shall be sufficient for the purpose of entering into the transactions between the WOS and Holding Company.
Further in case of Private Limited Company Transactions with a holding company, subsidiary or an associate company or a fellow subsidiary or an investing company or the venturer of the company shall not be considered as Related Party Transactions.
(Exemption Notification dated 5th June, 2015)
As per Regulation 23 (2) of SEBI (LODR) 2015, all related party transactions shall require prior approval of the audit committee
|28||203 and Rule 8||KMP- MD or CEO or Manager (in absence WTD), CS and CFO
|KMP is required to be appointed mandatorily in following type of Companies
1. Every Listed Company
2. Every Unlisted Public Company having a Paid up share Capital of INR.10 crores or more
|29||203 and Rule 8A||KMP- Company Secretary
|Every Company (Private or Public) having Paid up Capital of INR 10 Crores or more need to have full time Company Secretary in the Company as an employee CS|
|30||204||Secretarial Audit||Following types of Company need to have Secretarial Audit in prescribed format of Form MR-3
1. Every Listed Company and
2. Every Unlisted Public Company having-
a. Paid up Capital of INR 50 Crores or more; or
b. Turnover of INR 250 Crores or more ;or
c. Outstanding loans or borrowings from banks or public financial institutions of INR 100 crores or more.
|31||The Sexual harassment of Women at work place (Prevention, Prohibition and Redressal) Act,2013 POSH 2013||Sexual Harassments Policy under POSH Act, 2013 and Formation of ICC||POSH Act, 2013
This act was enacted to specifically deal with prevention, prohibition, and redressal of complaints of sexual harassment of women at the workplace. It is not a gender-neutral act, i.e. it only provides protection against sexual harassment of women.
“sexual harassment” includes any one or more of the following unwelcome acts or behavior (whether directly or by implication) namely:—
a) physical contact and advances; or
b) a demand or request for sexual favours; or
c) making sexually coloured remarks; or
d) showing pornography; or
e) any other unwelcome physical, verbal or non-verbal conduct of sexual nature;
Workplace- “Workplace” includes
a) any department, organization, undertaking, establishment, enterprise, institution, office, branch or unit which is established, owned, controlled or wholly or substantially financed by funds provided directly or indirectly by the appropriate Government or the local authority or a Government company or a corporation or a Co-operative society;
b) any private sector organization or a private venture, undertaking, enterprise, institution, establishment, society, trust, non-governmental organization, unit or service provider carrying on commercial, professional, vocational, educational, entertainment, industrial, health services or financial activities including production, supply, sale, distribution or service;
c) hospitals or nursing homes;
d) any sports institute, stadium, sports complex or competition or games venue, whether residential or not used for training, sports or other activities relating thereto;
e) any place visited by the employee arising out of or during the course of employment including transportation by the employer for undertaking such journey;
f) a dwelling place or a house;
g) unorganized sector in relation to a workplace means an enterprise owned by individuals or self-employed workers and engaged in the production or sale of goods or providing service of any kind whatsoever, and where the enterprise employs workers, the number of such workers is less than ten.
It is inclusive of places visited by women employee other than the office premises during the course of employment.
Internal Complaint Committee (ICC)-
(Chapter II, Section 4)
Every Employer of Workplace shall constitute an ICC, if it has a minimum of10 employees (male or female).
Where the offices or administrative units of the workplace are located at different places or divisional or sub-divisional level, ICC shall be constituted at all the administrative units or offices.
“Employee” means a person employed at a workplace for any work on regular, temporary, ad hoc or daily wage basis, either directly or through an agent, including a contractor, with or, without the knowledge of the principal employer, whether for remuneration or not, or working on a voluntary basis or otherwise, whether the terms of employment are express or implied and includes a co-worker, a contract worker, probationer, trainee, apprentice or called by any other such name;
Local Committee (LC)-
(Chapter III, Section 6)
Every District Officer shall constitute a Local Committee to receive and address the Complaints of Sexual Harassment of the establishments where ICC has not been constituted, due to less than minimum 10 workers.
Submission of Annual Report –
(Chapter VIII, Section 21)
The Internal Committee or the Local Committee, as the case may be, shall in each calendar year prepare, in such form and at such time as may be prescribed, an Annual Report and submit the same to the Employer and the District Officer.
Disclosure in Board’s Report
The Company shall also include in its Board’s Report a statement that the company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
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