The Ministry of Corporate Affairs, further to the notification No. G.S.R. 463(E)464(E)466(E) dated 5th June, 2015, has now provided some more relaxations / modifications to the Private companies, Section 8 companies and Government companies vide its notification dated 13th June, 2017.

However such relaxations / modifications can only be availed if the private company has not committed a default in filing of its financial statement and annual return in compliance with Section 137 and Section 92 of the Companies Act, 2013 (‘Act’). Interestingly the usage of word “default” again led to complexity in terms of identifying whether the company has committed default or not. Proviso to sub-section (1) of Section 137 of the Act states the following –

Provided further that financial statements adopted in the adjourned annual general meeting shall be filed with the Registrar within thirty days of the date of such adjourned annual general meeting with such fees or such additional fees as may be prescribed within the time specified under section 403:

Sub-section (4) of the Section 92 of the Act states the following –

Every company shall file with the Registrar a copy of the annual return, within sixty days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed, within the time as specified, under section 403.

Further Sub- section (1) of Section 403 states following –

Any document, required to be submitted, filed, registered or recorded, or any fact or information required or authorised to be registered under this Act, shall be submitted, filed, registered or recorded within the time specified in the relevant provision on payment of such fee as may be prescribed:

Provided that any document, fact or information may be submitted, filed, registered or recorded, after the time specified in relevant provision for such submission, filing, registering or recording, within a period of two hundred and seventy days from the date by which it should have been submitted, filed, registered or recorded, as the case may be, on payment of such additional fee as may be prescribed:

Provided further that any such document, fact or information may, without prejudice to any other legal action or liability under the Act, be also submitted, filed, registered or recorded, after the first time specified in first proviso on payment of fee and additional fee specified under this section.

Reading of second proviso states that even if the period of 270 days expired, documents may be submitted thereafter, in accordance with the clause and therefore, the company remains non-default till the same. The MCA may clarify the same further in due course.

The relaxations provided by the MCA to the private companies are summarized as below:

1. For the private companies (Start Ups) –

Section Modification / relaxation
2 (40) Private company, which is start up, are relaxed to include Cash Flow Statement in the Financial Statement.

(At present, OPC, small company and dormant company are availing this relaxation)

73 (2) Clauses (a) to (e) Relaxation from the compliances of these clauses for a period of 5 years from the date of incorporation.

(Simultaneously MCA has also relaxed these norms for other private companies too)

92 (1) Signing of Annual Return

In case of private company, which is a start up, Annual Return may be signed by the company secretary or where there is no company secretary, by the Director of the company

(At present, OPC and small company are availing this relaxation)

173 (5) Private company, which is a start up, shall be deemed to have complied with the provisions of this section if at least one meeting of Board of Directors has been conducted in each half of the financial year and the gap between the two meetings is not less than ninety days.

Further in case of OPC, if there is only one Director then this would not be applicable [proviso to Section 173(5)]

(At present, OPC, small company and dormant company are availing this relaxation)

Start up for this purpose refers to the private companies incorporated under the Companies Act, 2013 or the Companies Act, 1956 and recognized as start-up in accordance with the notification issued by the DIPP, Ministry of Commerce and Industry

2. For other private companies –

Section Modification/ Relaxation
73(2) Clauses (a)-(e) Compliances form these clauses are relaxed for the private companies –

a) Which accepts deposits from its Members not exceeding 100% of aggregate of the paid-up share capital, free reserve and securities premium account; OR

b) On compliance of all 3 conditions:

i. Private company is not an associate or subsidiary of any other company;

ii. Borrowing of such company from Banks or FIs or any body Corporate is less than twice of its paid-up share capital or Rs. 50 Crore whichever is lower; and

iii. The company has not defaulted in the repayment of borrowings existing at the time of accepting deposit.

(Earlier MCA provided exemption in respect of point (a) only, now the relaxation has been extended to start-ups and point(b) also)

92(1)(g) Instead of disclosing the remuneration of Directors and KMP in the Annual Return, the Small Companies shall disclose the aggregate amount of remuneration drawn by the Directors.

(Limited to Small Companies only)

143(3)(i) Following companies have been granted exemption to have in their Auditor’s Report, reporting on adequacy of internal financial controls system and operating effectiveness of such controls:

1. OPC

2. Small Companies

3. the Private Company which has a turnover of less than 50 Crore as per the latest Audited Financial Statements or which has an aggregate borrowing from Banks or FIs or any Body Corporate at any point of time during the financial year less than Rs.  25 Crore.

174(3) Interested Director would now be counted for the purpose of Quorum in such meeting after disclosure of interest u/s 184. MCA vide its notification dated 5th June, 2015 has provided relaxation in terms of Section 184 of the Act leaving the ambiguity for the purpose of counting such Directors in the Quorum. However, now they have clarified in terms of Quorum too.

Ravi VarmaAuthor : Ravi Varma (renowned CS faculty)

Email Id:

Read Other Articles of Ravi Varma

More Under Company Law


  1. johnson says:



  2. Rishabh Patni says:

    Whether internal control over financial reporting will apply to company which has turnover of more than 50 crore but has borrowing less than 25 crore ?/

  3. Preeti says:

    Exemption u/1s 143(3) – if my borrowing is less tha 25 crores and turnover more than 50 crores, Will the exemption still apply?

    1. Ravi Varma says:

      It is for any one condition until MCA further clarify .
      This case is more or less same to definition of small company as was envisaged under the act earlier and later on replaced with word ‘and’

  4. Manish Gupta says:

    Please share the link of notification in MCA site… I am unable to find any such notification in companies act, further no consequent change in audit report format is suggested so far… Pls update

    Thanks for update

  5. DIKSHA says:

    Hello Sir

    Firstly Thank You for this Summary , it is very useful.
    My query is related to Section 92(1)(g) in which there is a modification that the Small Companies shall disclose the aggregate amount of remuneration drawn by the Directors.
    So they have to disclose that in the ‘Annual Report’ or in ‘MGT-7’ .
    And if it is to be disclosed in Form MGT-7 then point X of it have column for the name of individual directors.Then how can we disclose the aggregate amount of remuneration ?

    Will this form be revised for Small Companies ?

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

November 2020