CA Himanshu SharmaCA Himanshu Sharma

Introduction – By Introduction of Companies Act,2013, Ministry of company affair has brought massive changes i.e. maximum of exemptions which were available to private companies under companies act,1956 have been withdrawn, lot of changes in acceptance of deposit rules through which private companies were not allowed to accept loan from relative and members which were the major source of fund. Some of them with bifurcation have been shown below:

Impact of Companies Act, 2013 on Private Companies

The Companies Act, 1956 The Companies Act, 2013
Maximum no of members restricted to 50. Maximum no of members restricted to 200.
Private Companies are not mandated to appoint MD/WTD/manager except Whole Time company Secretary in case company having a paid up capital of Rs. 5Crore or more. All Companies having Paid up capital of Rs.5Crore or more are required to appoint following whole Time KMP:
MD/CEO/WTD/Manager
Company Secretary and
CFO
No Requirements to have director resident in India. All companies including Pvt Companies must have atleast one director who stayed in india for a period of 182dayas or more during the previous calender year.
No requirement to file ‘Consent to act as a director’ with registrar of Companies A person appointed as a director shall not act as a director until his/her consent to hold the office as a director has been filed with the registrar of companies within 30days of his appointment.
Private companies were expempted while calculating maximum number of limit in which a person can act as a director. Now a person can act as a director in Max.20 companies out of which not more than 10 should be a  public Companies.
Applicable only to listed companies and companies having turnover in excess of Rs.50Crore or borrwing in excess of Rs.10Crore. Every Company, except One Person Company and small Company, are required to prepare Cash flow Statement.
As per Section 224(1B), private companies are not included while calculating ceiling limit. Maximum 20 Companies(inclusive of private companies)
No requirement All companies who fulfill the eligibility requirement, required to constitute a committee of atleast 3 director out of them 1 must be an independent director and required to spend atleast 2% of the average net profit on CSR activities.

Acceptance of deposit by companies from its directors, members and its relative.

Companies (Acceptance of Deposits) Rules, 1975 Companies (Acceptance of Deposits) Rules, 2014
 any amount received by a private company from a person who, at the time of  the  receipt  of  the  amount,  was  a  director,  relative  of  director  or member: any amount received from a person who, at the time of the receipt of the amount, was a director of the company:
 Provided that the director or member, as the case may be, from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given  out  of  funds  acquired  by  him by  borrowing  or  accepting  from others; Provided that the director from whom money is received, furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is   not being given out of funds acquired by him by borrowing or accepting loans or deposits from others;
Earlier Not Required As per companies Act 2013,if the private company have any loan received from any person other than director,then they have to file a statement in Form DPT-4 upto 30th June 2014 with the ROC.
any  amount  received  by  a  company  from  any other company; any  amount  received  by  a  company  from  any other company;
any amount received by way of subscriptions to any shares, stock, bonds or debentures such bonds or debentures as are covered by sub-clause (x) pending the allotment of the said shares, stock, bonds or debentures and any amount received by way of calls in advance on shares, in accordance with the Articles of Association of the Company so long as such amount is not repayable to the members under the Articles of Association of the Company ; any amount received  and  held  pursuant to an offer made in accordance with the provisions of the Act towards subscription to any securities, including share application money or advance towards allotment of securities pending allotment, so long as such amount is appropriated only against the amount due on allotment of the securities applied for;
Explanation.- For the purposes of this sub-clause, it is hereby clarified that –
(a)  Without  prejudice  to  any  other  liability  or action, if the securities for which application money or advance for such securities was received cannot be  allotted  within  sixty  days  from  the  date  of receipt of the application money or advance for such securities and such application money or advance is not refunded to the subscribers within
fifteen days from the date of completion of sixty days, such amount shall be treated as a deposit under these rules.
(b) any adjustment of the amount for any other purpose shall not be treated as refund.

(The author is a member of ICAI, He Can be reached at Sharman03@gmail.com)

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Category : Company Law (3467)
Type : Articles (14857)
Tags : Companies Act (1935) Companies Act 2013 (1707)

0 responses to “Impact of Companies Act, 2013 on Private Companies & Changes in Acceptance of Deposit Rules”

  1. H K says:

    Sir,
    What are the rules for a Private Company, 2 directors, loan received from Mother in law of one director in 2004, charge against the loan was registered with the ROC that year.
    Does the company need to follow the above reproduced here :As per companies Act 2013,if the private company have any loan received from any person other than director,then they have to file a statement in Form DPT-4 upto 30th June 2014 with the ROC. ???
    Thank you.
    Regards.

  2. CA Rajesh Pabari says:

    Thanks for the analysis.

    A small suggestion to include appropriate headings for the points, as Headings for the comparison given are missing.

  3. SK Shetty says:

    As per the rules notified, there is no need to appoint Company Secretary in Private Companies. Only Listed and Public companies required to appoint CS as KMP.

  4. Arun Gaur says:

    For the CSR Committee, if there are only 2 Directors in a Company, then Both the Directors can head the CSR Committee. NO NEED TO APPOINT AN INDEPENDENT DIRECTOR.

  5. Anoop CHorsiya says:

    What effect on public copmany

  6. B.Chackrapani warrier says:

    Read. Thanks for the writing.

  7. g ramakrishnan says:

    KMP PROVISIONS PROVIDED 10 CRORE ( NOT 5 CRORE)- KEY MANAGERIAL PERSONNEL

  8. abhijit puglia says:

    its helpful.

  9. CMA, CS Vineet Chopra says:

    for appointment of CS, in CA 2013, threshold is Rs. 10 Cr. in Rules, whereas in your above analysis it is still mentioned as Rs. 5 Cr. please re-check and provide actual position.

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