Exemptions to Private Companies under Companies Act, 2013:
As we all know that some exemptions were granted by MCA to Private Companies on 05.06.2015, the MCA has added more exemptions by amending the notification issued on 5th June, 2015 and by notifying further exemptions on 13th June, 2017:
1. New Concept of Start-up/ Start-up Companies has been introduced:
Start up Private Companies are not required to prepare the Cash Flow Statements under Companies Act, 2013.
For the purposes of this Act, the term 'start-up' or "start-up company" means a private company incorporated under the Companies Act, 2013 (18 of 20'l3) or the Companies Act, 1956 ('l of 1956) and recognized as start-up in accordance with the notification issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry."
2. The Private Companies which are small companies are not required to mention the amount of remuneration drawn by Directors in Annual Return.
3. The disclosure requirement of Adequacy of Internal financial control in Auditor’s report has been removed for a private company which is One Person Company or a small company or which has turnover less than rupees fifty crores as per latest audited financial statement or which has aggregate borrowings from banks or financial institutions or anybody corporate at any point of time during the financial year less than rupees twenty-five crore.
4. The Startup Private Companies are also not required to hold minimum number of four board meetings in a year.
Earlier there were only One Person Company, small company and dormant company in this category of exemption.