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Compliances based on threshold limits under the Companies Act, 2013

There are several provisions under the Companies Act, 2013 which are applicable based on threshold limits. This article gives a bird’s eye view on compliances based on several threshold limits under the Companies Act, 2013.

Chart of Compliances based on threshold limits under the Companies Act, 2013

SR. NO. REFERENCE OF THE PROVISION UNDER THE COMPANIES ACT, 2013 COMPLIANCE APPLICABILITY WITH THRESHOLD LIMIT
1. Section 2(40) Preparation of Cash Flow Statement All Companies except:

a. One Person Company;

b. Small Company;

c. Dormant Company;

d. Private Company if such private company is a start-up.
2. Section 92 read with Rule 11(2) of Companies (Management and Administration) Rules, 2014 Certification of Annual Return by a Company Secretary in Practice (MGT-8) a. Listed Companies;

b. Every Company having;

i. Paid-up share capital of Rs.10 crore or more;

OR

ii. Turnover of Rs.50 crore or more,
3. Section 108 read with Rule 20(2) of Companies (Management and Administration) Rules, 2014

 

 Voting by Electronic means Every Company;

a. Whose Equity Shares are listed on a recognized stock exchange and;

b. Having 1000 or more members.

Exception:

a. An enterprise or institutional investor referred to in Chapter XB or Chapter XC of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009;

OR

b. Nidhi Company.
4. Section 120 read with Rule 27(1) of the Companies (Management and Administration) Rules, 2014 Maintenance of records in electronic form [Not mandatory] a. Listed Companies;

b. Company having 1000 or more shareholders or debenture holders or other security holders.
5. Section 133 read with Rule 4(1) of Companies (Indian Accounting Standards) Rules, 2015 Mandatory requirement to comply with Indian Accounting Standards 1. Companies other than NBFCs:

A. For the accounting periods beginning on or after 1st April, 2016:

a. Companies whose equity shares 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 of more;

b. Companies other than above and having net worth of Rs.500 crore or more;

c. Holding, subsidiary, joint venture or associate companies of companies covered as above.

B. For the accounting periods beginning on or after 1st April, 2017:

a. Companies whose equity shares 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 of more;

b. Unlisted companies having net worth of Rs.250 crore or more but less than Rs.500 crore;

c. Holding, subsidiary, joint venture or associate companies of companies covered as above.

2. NBFCs:

A. For accounting period beginning on or after 1st April, 2018:

a. NBFCs having net worth of Rs.500 crore or more;

b. Holding, subsidiary, joint venture or associate companies of companies covered as above, other than those already covered under category (1) above;

c. Notwithstanding the other thresholds limits, the holding, subsidiary, joint venture or associate companies of Scheduled commercial banks (excluding RRBs) would be required to prepare Ind AS based on financial statements for accounting period beginning from 1st April, 2018 onwards.

B. For accounting periods beginning on or after the 1st April, 2019:

a. NBFCs Companies whose equity shares 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 less than Rs.500 crore;

b. NBFCs, that are unlisted companies, having net worth of Rs.250 crore or more but less than Rs.500 crore;

AND

c. Holding, subsidiary, joint venture or associate companies of companies covered as above other than those already covered in all above clauses of (1) and (2).

Not mandatory for:

§  Companies whose securities are listed or are in process of being listed on SME Exchange as referred to in the Institutional Trading Platform without initial public offering in accordance with the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
6. Section 134 read with Rule 8(4) of the Companies (Accounts) Rules, 2014 Disclosure in Board’s Report for manner of formal annual evaluation of Board of Directors, its Committees and of individual Directors 1. Listed Companies;

2. Public Companies having paid up share capital of Rs.25 crore or more at the end of preceding financial year.

Not applicable:

§ 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.
7. Section 135(1) read with Rule 3 of the Companies (Corporate Social Responsibility Policy) Rules, 2104 Companies (Corporate Social Responsibility Company having;

1. Net worth of Rs.500 crore or more;

OR

2. Turnover of Rs.1000 crore or more;

OR

3.   Net profit of Rs.5 crore or more during the immediately preceding financial year.
8. Section 136 read with Rule 11 of Companies (Accounts) Rules, 2014 Circulation of Financial statement in electronic to shareholders holding shares on Demat form or who have consented in writing or otherwise by any other mode (not mandatory) 1. Listed companies;

2. Public companies with

a. Net worth of Rs.1 crore or more;

OR

b. Turnover of Rs.10 crore or more
9. Section 137 read with Rule 3 of the Companies (filing of documents and Forms in Extensible Business Reporting Language) Rules, 2015 Filing through XBRL mode 1. All companies which are listed with any Stock Exchange(s) in India and their Indian subsidiaries;

2. All companies having paid-up share capital of Rs.5 crore or more;

3. All companies having turnover or Rs.100 crore or more

4. All companies which are required to prepare their financial statements in accordance with Companies (Indian Accounting Standards) Rules, 2015

Not applicable on:

§ Housing Finance Companies;

§ Companies engaged in the business of banking or insurance sector.
10. Section 138 read with Rule 13(1) of Companies (Accounts) Rules 2014 Appointment of Internal Auditor 1. Listed Companies;

2. Every unlisted public company:

a. Paid up share capital of Rs.50 crore or more;

OR

b. Turnover of Rs.200 crore or more

OR

c. Outstanding loans or borrowing from banks or PFI exceeding Rs.100 crore;

OR

d. Outstanding deposit of Rs.25 crore or more

3. Every Private Company having:

a. Turnover of Rs.200 crore or more;

OR

b. Outstanding loans or borrowing from banks or PFI exceeding Rs.100 crore;

Exemption:

1. Specified IFSC Public Company;

2. Specified IFSC Private Company

Subject to the condition that it is prescribed in the Articles of Association of Company.
11. Section 139 read with Rule 5 of the Companies (Audit and Auditors) Rules, 2014 Rotation of Auditor a. Listed Companies;

b. All unlisted public companies having paid up share capital of Rs.10 crore or more;

c. All private limited company having paid up share capital of Rs.50 crore or more;

d. All companies having paid up share capital of below threshold limit as mentioned in (2) & (3) above, but having public borrowings from banks, financial institutions or public deposits of Rs.50 crore or more.

Not applicable on:

a. One Person Company;

b. Small Company;

c. Specified IFSC Public Company;

d. Specified IFSC Private Company.
12. Section 143 read with Rule 1(2) of Companies (Auditor’s Report) Order, 2020 Companies (Auditor’s Report) Order, 2020 1. Every company including a foreign company except;

a. Banking Company;

b. Insurance Company;

c. Section 8 company;

d. One Person Company;

e. Small Company;

f. Private Limited Company, not being a subsidiary or holding company of a public company, having

i. paid up capital and reserves and surplus not more than Rs. 1 crore as on the balance sheet date;

AND

ii. which does not have total borrowings exceeding Rs. 1 crore fromany bank or financial institution at any point of time during the financial year;

AND

iii. which does not have a total revenue as disclosed in Scheduled III to the Companies Act (including revenue from discontinuing operations) exceeding Rs.10 crore  during the financial year as per the financial statements.
13. Section 143(3) Reporting of Internal Financial Control in Auditors Report All companies except private companies which is;

a. One Person Company;

b. Small Company;

c. Having turnover of less than Rs.50 crore as per the latest financial statement & aggregate borrowings from banks or financial institutions or any body corporate at any point of time during the financial year less than Rs.25 crore.
14. Section 148 read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014 Maintenance of Cost Records Companies falling under list of regulated and non-regulated sectors as per Rule 3of the Companies (Cost Records and Audit) Rules, 2014 having an overall turnover from all its products & services during the immediately preceding financial year Rs.35 crore or more.

Not applicable on:

a. Foreign companies having only liaison offices falling under category 33 of Non-regulated list;

b. Companies classified as Micro or Small enterprise as per MSME Act, 2006
15. Section 148 read with Rule 4 of the of the Companies (Cost Records and Audit) Rules, 2014 Appointment of cost auditor 1. Companies falling under list of regulated and regulated sectors as per Rule 3of the Companies (Cost Records and Audit) Rules, 2014 having;

a. Overall annual turnover from all its products & services during the preceding financial year Rs.50 crore or more;

AND

b. Aggregate turnover of the Individual products or services during the preceding financial year Rs.25 crore or more.

2. Companies falling under list of regulated and regulated sectors as per Rule 3of the Companies (Cost Records and Audit) Rules, 2014 having;

a. Overall annual turnover from all its products & services during the preceding financial year Rs.100 crore or more;

AND

b. Aggregate turnover of the Individual products or services during the preceding financial year Rs.35 crore or more.

Not applicable on:

1. Companies whose revenue from exports, in foreign exchange 75% of its total revenue;

OR

2. Company which is operating from Special Economic Zone;

3. Companies which is engaged in generation of electricity for captive consumption through Captive Generating Plan.
16. Section 149 read with Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 Appointment of Independent Director 1. Listed Companies;

2. Unlisted public companies having;

a. Paid up share capital of Rs.10 crore or more;

OR

b. Turnover of Rs.100 crore or more;

OR

c. Aggregate outstanding loans, debentures and deposits of Rs.50 crore or more

Not applicable on following unlisted public companies;

a. Joint venture;

b. Wholly owned subsidiary;

c. Dormant company.
17. Section 149 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014 Appointment of women director 1. Listed companies;

2. Public companies having;

a. Paid up capital of Rs.100 crore or more;

OR

b. Turnover of Rs.300 crore or more.
18. Section 177 read with Rule 6 of the Companies (Meeting of Board and its Powers) Rule, 2014 Audit Committee 1. Listed Companies;

2. Unlisted public companies having;

a. Paid up share capital of Rs.10 crore or more;

OR

b. Turnover of Rs.100 crore or more;

OR

c. In aggregate, outstanding loans, debentures and deposits, exceeding Rs.50 crore

Not applicable on following;

I. Unlisted public companies;

a. Joint Venture;

b. Wholly owned subsidiary;

c. Dormant Company;

II.   Specified IFSC Public Companies
19. Section 177 read with Rule 7(1) of the Companies (Meeting of Board and its Powers) Rule, 2014 Vigil Mechanism 1. Listed Companies;

2. Unlisted companies which;

a. Accepts deposits from public;

OR

b. Have borrowed money from banks and PFI exceeding Rs.50 crore.

Not applicable on:

a.   Specified IFSC Public Companies.
20. Section 178 read with Rule 6 of the Companies (Meeting of Board and its Powers) Rule, 2014 Nomination and Remuneration Committee 1. Listed Companies;

2. Unlisted Public Companies having;

a. Paid up share capital of Rs.10 crore or more;

OR

b. Turnover of Rs.100 crore or more;

OR

c. In aggregate, outstanding loans, debentures and deposits, exceeding Rs.50 crore.

Not applicable on:

1. Following unlisted public companies;

a. Joint Venture;

b. Wholly owned subsidiary;

c. Dormant Company.

2. Section 8 Company;

3. Government Companies;

4. Specified IFSC Public Companies
21. Section 178(5) Stakeholder Relationship Committee A public company having more than 1000 shareholders, debenture-holders, deposit-holders and any other security holders at any time during a financial year.

Not applicable on: 

a. Section 8 Company;

b. Specified IFSC Public Companies.
22. Section 188 read with Rule 15 (3) of the Companies (Meeting of Board and its Powers) Rule, 2014

 

 Passing of Ordinary Resolution 1. Sale, purchase or supply of any goods or material, directly or through appointment of agent, amounting to 10% or more of the turnover of the company, as mentioned in clause (a) and clause (e) respectively of sub-section (1) of section 188;

2. Selling or otherwise disposing of or buying property of any kind, directly or through appointment of agent, amounting to 10% or more of net worth of the company, as mentioned in clause (b) and clause (e) respectively of sub-section (1) of section 188;

3. Leasing of property any kind amounting to 10% or more of the turnover of the company, as mentioned in clause (c) of sub-section (1) of section 188;

4. Availing or rendering of any services, directly or through appointment of agent, amounting to 10% or more of the turnover of the company as mentioned in clause (d) and clause (e) respectively of sub-section (1) of section 188;

5. A contract for appointment to any office or place of profit in the company, its subsidiary company or associate company at a monthly remuneration exceeding Rs.2.5 Lakhs as mentioned in clause (f) of sub-section (1) of section 188;

6. A contract for remuneration for underwriting the subscription of any securities or derivatives thereof, of the company exceeding 1% of the net worth as as mentioned in clause (g) of sub-section (1) of section 188.
23. Section 203 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Appointment of Key Managerial Personnel 1.   Listed Companies;

2.   Public company having paid up capital of more than or equal to Rs.10 crore.
24. Section 203 read with Rule 8A of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Appointment of whole time Company Secretary Every private company having a paid up share capital of Rs.10 crore or more other
25. Section 204 read with Rule 9(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Appointment of Secretarial Auditor 1. Every public company having a paid-up share capital of Rs.50 crore or more;

OR

2. Every public company having a turnover of Rs.250 crore rupees or more;

OR

3. Every company having outstanding loans or borrowings from banks or public financial institutions of Rs.100 crore or more.
26. Section 233 Merger or Amalgamation of certain companies 1. Merger or Amalgamation between 2 or more Small Companies;

2. Holding Company and its wholly owned subsidiary company;

3. Such other companies as may be prescribed.
27. Section 248 read with Rule 3(1) of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 Application for removal of names from the Register of Companies Any company which;

A.  has failed to commence its business within one year of its incorporation;

OR

B.  is nor carrying on any business or operation for a period of two immediately preceding financial years and had not made any application within such period for obtaining the status of dormant company under section 455

Not applicable on;

1.   listed companies;

2.   companies that have been delisted due to non-compliance of listing regulations or listing agreement or any other statutory laws;

3.   vanishing companies;

4.   companies where inspection or investigation is ordered and being carried out or actions on such order are yet to be taken up or were completed but prosecutions arising out of such inspection or investigation  are pending in the Court;

5.   companies where notices under section 234 of the Companies Act, 1956 (1 of 1956) or section 206 or section 207 of the Act have been issued by the Registrar or Inspector and reply thereto is pending or report under section 208 has not yet been submitted or follow up of instructions on report under section 208 is pending or where any prosecution arising out of such inquiry or scrutiny, if any, is pending with the Court;

6.   companies against which any prosecution for an offence is pending in any court;

7.   companies whose application for compounding is pending before the competent authority for compounding the offences committed by the  company or any of its officers in default;

8.   companies, which have accepted public deposits which are either outstanding or the company is in default in repayment of the same;

9.   companies having charges which are pending for satisfaction; and

10.  Companies registered under section 25 of the Companies Act, 1956 or section 8 of the Act.

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Author Bio

Name: CS Mohit Patel
Qualification: CS
Company: Mohit Patel & Associates, Company Secretaries & Trademark Attorney
Location: Mumbai, Maharashtra, India
Member Since: 29 Jul 2019 | Total Posts: 34
Mohit P. Patel is a Member of the Institute of Company Secretaries of India and Trademark Attorney and has done his graduation in Law. He is accomplished and diligent Company Secretary and Trademark Attorney with a strong track record of ensuring legal compliance and protecting intellectual property View Full Profile

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7 Comments

  1. Shrinath says:

    What are the threshold limits for a private limited company with turnover less than 10 Crore and cash transactions less than 5% (receipts as well as payments).

      Reply
  2. Ankit says:

    HI I have a small private company, with annual turnover less than 5 Lakhs, with no profits. Do i need to pay my CA for any compliances? He is charging me for AOC4, MGT7 and ADT1, is it alright if i dont get any compliances for my company? Need help, please revert. Thanks

      Reply
  4. Swati Srivastava says:

    Very well compiled.. Just one correction, paid up capital for public companies for section 139(2) is Rs. 10 crore and not Rs. 100 crore

      Reply

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