The CCompanies Act, 2013 mandates the formation of specific committees for corporate governance and compliance. The Audit Committee (Section 177) applies to listed companies and public companies meeting certain financial thresholds. It must have at least three directors, a majority being independent, and a chairman capable of understanding financial statements. The Nomination and Remuneration Committee (Section 178) is required for listed and certain public companies, needing at least three non-executive directors, with at least 50% being independent. The Stakeholder Relationship Committee (Section 178) must be constituted if a company has over 1,000 shareholders, debenture holders, deposit holders, or security holders. It is chaired by a non-executive director, with other members appointed by the board. The Corporate Social Responsibility (CSR) Committee (Section 135) applies to companies with a net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more. If CSR expenditure is ₹50 lakh or less, forming this committee is not required.
Committees Required to Be Mandatorily Constituted Under the Companies Act, 2013
| COMMITTIES | Companies Act, 2013 |
| Audit Committee
Nomination and Remuneration Committee STAKEHOLDER RELESHIONSHIP COMMITTEE CORPORATE SOCIAL RESPONSIBILITY COMMITTEE |
Section 177 OF THE COMPANIES ACT, 2013 ARE governed under related the constitution of the audit committee.
Applicability: Every Listed Company Every Public Company (i) Having a Paid up capital of 10cr. OR More. OR (ii) Having turnover is equal to 100 cr or more than 100 crore OR Composition:
Provision: Section 178 read with Companies (Meeting of Board and its power) Rules, 2014 deals for the composition of the Nomination and Remuneration Committee. Applicability: Every Listed Company Every Public Company
Composition:
Section 178 are governed for constitution of the Stakeholder Relationship Committee Applicablity: If company has more than 1000 shareholders, debenture holders, deposit holders and other security holders at any time during the f.y. Composition: Chairperson: Chairperson of the committee shall be non-executive chairperson. Other members as may be decided by the board. Section 135 of the Companies Act, 2013 deals with the provision about the CSR. Applicability Every Company having NET WORTH – 500Cr or More OR Turnover __ 1000 cr or more OR Net Profit- 5 cr or more If the CSR Expenditure is less than the or equal to 50 lakhs there is no requirement to constitute the committee. |
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