MCA vide notification dated 5th July, 2015 has notified the exemption u/s 462 with respect to the following companies:
– Section 8 Company
– Private Company
– Government Company
– Nidhi Company
The texts of the Exemptions, Modifications and Adaptations granted with respect to each class of companies through the said notification are reproduced as below:
1. Section 8 Company
| S. No. | Provisions of the Act | Exceptions, Modifications and Adaptations |
| 1. | Company Secretary Section 2(24) |
Exemption The provisions of clause (24) of section 2 shall not apply. |
| 2. | Definition of Private Company Section 2(68) |
Exemption The requirement of having minimum paid-up share capital shall not apply. |
| 3. | Definition of Public Company Section 2(71) |
Exemption The requirement of having minimum paid-up share capital shall not apply. |
| 4. | Annual General Meeting Section 96 (2) |
Modification in sec 96(2) In sub-section (2), after the proviso and before the explanation, the following proviso shall be inserted, namely:- Provided further that the time, date and place of each annual general meeting are decided upon before-hand by the boardof directors having regard to the directions, if any, given in this regard by the company in its general meeting Existing text of sec 96(2) (2) Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate: Provided that the Central Government may exempt any company from the provisions of this sub-section subject to such conditions as it may impose. Explanation.—For the purposes of this sub-section, “National Holiday” means and includes a day declared as National Holiday by the Central Government. |
| 5. | Notice of meeting Section 101(1) |
Modification in sec 101(1) In sub-section (1), for the words "twenty one days", the words "fourteen days" shall be substituted. Existing sec 101(1) 1. A general meeting of a company may be called by giving not less than clear twenty-one days’ notice either in writing or through electronic mode in such manner as may be prescribed: Provided that a general meeting may be called after giving a shorter notice if consent is given in writing or by electronic mode by not less than ninety-five per cent. of the members entitled to vote at such meeting. |
| 6. | Minutes of proceedings of general Meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot. Section 118 | Exemption The section shall not apply as a whole except that minutes may be recorded within thirty days of the conclusion of every meeting in case of companies where the articles of association provide for confirmation of minutes by circulation. |
| 7. | Right of member to copies of audited Financial statement. Section 136 (1) |
Modification In sub-section (1), for the words "twenty one days", the words "fourteen days" shall be substituted. Existing sec 136(1) 1) Without prejudice to the provisions of section 101, a copy of the financial statements, including consolidated financial statements, if any, auditor’s report and every other document required by law to be annexed or attached to the financial statements, which are to be laid before a company in its general meeting, shall be sent to every member of the company, to every trustee for the debenture-holder of any debentures issued by the company, and to all persons other than such member or trustee, being the person so entitled, not less than twenty-one days before the date of the meeting |
| 8. | Company to have Board of Directors. Section 149(1) & 1st proviso to sub-section (1) |
Exemption The requirement related to number of directors and permission of shareholders for having director beyond 15 Shall not apply. |
| 9. | Company to have Board of Directors. Section 149 (4), (5), (6), (7), (8), (9), (10), (11), clause (i) of subsection (12) and subsection (13) |
Exemption The requirement related to independent director and all connected provisions shall not apply |
| 10. | Manner of selection of Independent directors and Maintenance of databank of independent directors. Section 150 |
Exemption Shall not apply. |
| 11. | Appointment of directors. Proviso to section 152 (5) |
Exemption The requirement related to justification in explanatory statement for appointment of independent director shall not apply. |
| 12. | Right of persons other than retiring directors to stand for Directorship. Section 160 |
Exemption Shall not apply to companies whose articles provide for election of directors by ballot. |
| 13. | Number of directorships Section 165(1) |
Exemption Section 8 company shall not be counted for the purpose of counting the directorships |
| 14. | Meetings of Board. Section 173(1) |
Exemption subject to Shall apply only to the extent that the Board of Directors, of such Companies shall hold at least one meeting within every six calendar months |
| 15. | Quorum for meetings of Board Section 174(1) |
Modification in sec 174(1) In sub-section (1),—
"Provided that the quorum shall not be less than two members" |
| 16. | Audit Committee Section 177(2) |
Omission in sec 177(2) The words "with independent directors forming a majority" shall be omitted. |
| 17. | Nomination And Remuneration Committee and Stakeholders Relationship Committee Section 178 |
Exemption Shall not apply. |
| 18. | Powers of Board. Section 179 |
Relaxation to exercise certain powers through circulation instead of at a meeting Following matter may be decided by the Board by circulation instead of at a meeting.
|
| 19. | Disclosure of interest by director. Section 184(2) |
Exemption subject to Shall apply only if the transaction with reference to section 188 on the basis of terms and conditions of the contract or arrangement exceeds one lakh rupees. |
| 20. | Register of contracts or Arrangements in which directors are interested. Section 189 |
Exemption subject to Shall apply only if the transaction with reference to section 188 on the basis of terms and conditions of the contract or arrangement exceeds one lakh rupees. |
2. Private Company
| S. No. | Provisions of the Act | Exceptions/ Modifications /Adaptations |
| 1. | Related party Section 2 (76) (viii) of Chapter I |
Exemption Shall not apply with respect to section 188. 2(76)
|
| 2. | Kinds of share capital & Voting rights section 43 & section 47 of Chapter IV |
Exemption Shall not apply where memorandum or articles of association of the private company so provides. |
| 3. | Further issue of share capital Section 62 (1) (a) (i) of Chapter IV |
Modification in sec 62(1) (a) (i) Shall apply with following modifications:- In clause (a), in sub-clause (i), the following proviso shall be inserted, namely:- Provided that notwithstanding anything contained in this sub-clause and sub-section (2) of this section, in case ninety per cent, of the members of a private company have given their consent in writing or in electronic mode, the periods lesser than those specified in the said subclause or sub-section shall apply. Existing sec 62 (1) (a) (i) Where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares shall be offered— (a) to persons who, at the date of the offer, are holders of equity shares of the company in proportion, as nearly as circumstances admit, to the paid-up share capital on those shares by sending a letter of offer subject to the following conditions, namely:— (i) the offer shall be made by notice specifying the number of shares offered and limiting a time not being less than fifteen days and not exceeding thirty days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined; |
| 4. | Further issue of share capital Section 62 (1) (b) of Chapter IV |
Modfication in sec 62 (1) (b) In clause (b), for the words “special resolution”, the words “ordinary resolution” shall be substituted. Existing sec 62 (1) (a) (1) Where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares shall be offered— (b) to employees under a scheme of employees’ stock option, subject to special resolution passed by company and subject to such conditions as may be prescribed |
| 5. | Restrictions on purchase by company or giving of loans by it for purchase of its shares. Section 67 of Chapter IV |
Exemption subject to Shall not apply to private companies –
|
| 6. | Prohibition on acceptance of deposits from public. section 73(2) (a) to (e) of Chapter V |
Exemption subject to The provisions relating to manner of accpetance of deposits shall not apply to a private company which accepts from its members monies not exceeding one hundred per cent, of aggregate of the paid up share capital and free reserves, and such company shall file the details of monies so accepted to the Registrar in such manner as may be specified. |
| 7. | Notice of meeting, Statement to be annexed to notice, Quorum for meetings, Chairman of meetings, Proxies, Restriction on voting rights, Voting by show of hands & Demand for poll. Sections 101 to 107 and section 109 of Chapter VII |
Exemption Shall apply unless otherwise specified in respective sections or the articles of the company provide otherwise. |
| 8. | Resolutions and agreements to be filed. Section 117 (3) (g) of Chapter VII |
Exemption Not required to file MGT-14 for board resolutions passed u/s 179 |
| 9. | Eligibility, qualifications and disqualifications of auditors. section 141(3) (g) of Chapter X |
Exemption with modification sec 141 (3) (g) Shall apply with the modification that the words “other than one person companies, dormant companies, small companies and private companies having paid-up share capital less than one hundred crore rupees” shall be inserted after the words “twenty companies”. Existing sec (141) (3) (g) (3) The following persons shall not be eligible for appointment as an auditor of a company, namely:— (g) a person who is in full time employment elsewhere or a person or a partner of a firm holding appointment as its auditor, if such persons or partner is at the date of such appointment or reappointment holding appointment as auditor of more than twenty companies. |
| 10. | Right of persons other than retiring directors to stand for directorship Section 160 of Chapter XI |
Exemption Shall not apply. |
| 11. | Appointment of directors to be voted individually section 162 of Chapter XI |
Exemption Shall not apply. |
| 12. | Restrictions on powers of Board. Section 180 of Chapter XII |
Exemption Shall not apply. |
| 13. | Disclosure of interest by director Section 184 (2) of Chapter XII |
Exemption Shall apply with the exception that the interested director may participate in such meeting after disclosure of his interest. |
| 14. | Loan to Directors section 185 of Chapter XII |
Exemption subject to Shall not apply to a private company –
|
| 15. | Related party transactions second proviso of section 188(1) of Chapter XII |
Exemption The provisions related to non-participation in the shareholders meeting by related person shall not apply |
| 16. | Appointment of managing director whole-time director or manager Section 196 (4) & (5) of Chapter XIII |
Exemption The requirement related to appointment of MD/WTD & Manager in accordance with Schedule V of the Act along with obtaining permission of shareholders for their appointment shall not apply. |
3. Government Companies
| S. No. | Provisions of the Act | Exceptions, Modifications and Adaptations |
| 1. | Memorandum Section 4 |
Omission In section 4. in sub-section (1), in clause (a), the words ‘in the case of a public limited company, or the last words “Private Limited’' in the case of a private limited company’ shall be omitted. |
| 2. | Transfer and transmission of securities Section 56 |
Adaptation In sub-section (1), after the proviso, the following provisos shall be inserted, namely:- Provided further that the provisions of this sub-section, in so far as it requires a proper instrument of transfer, to be duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee, shall not apply with respect to bonds issued by a Government company, provided that an intimation by the transferee specifying his name, address and occupation, if any, has been delivered to the company along with the certificate relating to the bond; and if no such certificate is in existence, along with the letter of allotment of the bond: Provided also that the provisions of this sub-section shall not apply to a Government Company in respect of securities held by nominees of the Government. |
| 3. | Declaration in respect of Beneficial interest in any share. Section 89 |
Exemption Shall not apply. |
| 4. | Investigation of beneficial ownership of shares in certain cases. Section 90 |
Exemption Shall not apply. |
| 5. | Annual general meeting. section 96 (2) |
Modification in sec 96 (2) In sub-section (2), for the words "some other place within the city, town or village in which the registered office of the company is situate", the words "such other place as the Central Government may approve in this behalf’ shall be substituted. Existing sec 96 (2) Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate |
| 6. | Declaration of dividend. second proviso of section 123(1) |
Exemption The provision that in case owing to inadequacy or absence of profits in any financial year, any company proposes to declare dividend out of the accumulated profits earned by it in previous years and transferred by the company to the reserves, such declaration of dividend shall not be made except in accordance with such rules as may be prescribed in this behalf , shall not apply to a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments. |
| 7. | Declaration of dividend. section 123(4) |
Exemption The requirement related to dspositing dividned including interim dividend in a separate bank account shall not apply to a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments or by one or more Government Company. |
| 8. | Financial Statement Section 129. |
Exemption subject to Shall not apply to the extent of application of Accounting Standard 17 (Segment Reporting) to the companies engaged in defence production. |
| 9. | Financial statement, Board’s report, etc. Section 134(3) (e) |
Exemption Requirement related to disclosure of remuneration policy in the director’s report shall not apply. |
| 10. | Financial statement, Board’s report, etc. Section 134(3) (p) |
Exemption Requirement related to dislcosure of manner in which evluation of board, its committee and directors is undertaken in the director’s report shall not apply 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 its own evaluation methodology. |
| 11. | Company to have Board of Directors section 149(1 )(b) and first proviso to section 149 (1) |
Exemption The restriction on maximum number of directors to 15 along with requirement of shareholders approval ofr increasing the number of directors beyond 15 shall not apply. |
| 12. | Company to have Board of Directors Section 149 (6)(a) |
Modification in sec 149 (6) (a) In section 149, in sub-section (6), in clause (a), for the word “Board”, the words “Ministry or Department of the Central Government which is administratively in charge of the company, or, as the case may be, the State Government” shall be substituted. Existing sec 149 (6) (a) who, in the opinion of the Board, is a person of integrity and possesses relevant expertise and experience |
| 13. | Company to have Board of Directors Section 149 (6) |
Exemption The definition of independent director shall not apply. |
| 14. | Appointment of director subsection (5) of section 152 |
Exemption Requirement to obtain consent of director before his appointment shall not apply where appointment of such director is done by the Central Government or State Government, as the case may be. |
| 15. | Appointment of director Section 152 (6) & (7) |
Exemption The requirement related to rotation of dirctors along with manner of filling vacany arising due to retiring director shall not apply to –
|
| 16. | Right of persons other than retiring directors to stand for directorship Section 160. |
Exemption Shall not apply to –
|
| 17. | Appointment of directors to be voted individually Section 162 |
Exemption Shall not apply to —
|
| 18. | Option to adopt principle of proportional representation for appointment of directors Section 163 |
Exemption Shall not apply to —
|
| 19. | Disqualifications for appointment of director. subsection (2) of section 164 |
Exemption The disqualification arising due to non-filing of annual return, financial statement or non-payment of deposits, redemption of debentures etc. shall not apply. |
| 20. | Register of directors and key managerial personnel and their shareholding section 170. |
Exemption Shall not apply to a Government Company in which the entire share capital is held by the Central Government, or by any State Government or Governments or by the Central Government or by one or more State Governments. |
| 21. | Members’ right to inspect Section 171 |
Exemption Shall not apply to a Government Company in which the entire share capital is held by the Central Government, or by any State Government or Governments or by the Central Government or by one or more State Governments. |
| 22. | Audit Committee Section 177(4) |
Modification In clause (i) of sub-section (4) of the section 177, for the words “recommendation for appointment, remuneration and terms of appointment” the words “recommendation for remuneration” shall be substituted. Existing sec 177 (4) (i) The recommendation for appointment, remuneration and terms of appointment of auditors of the company |
| 23. | Nomination and Remuneration Committee and Stakeholders Relationship Committee. Section 178 (2), (3) and (4) |
Exemption The provisions related to recommendation of directors by the committee , remuneration policy shall not apply to Government company except with regard to appointment of‘senior management' and other employees. |
| 24. | Loan to Directors Section 185 of Chapter XII |
Exemption subject to Shall not apply to Government company in case such company obtains approval of 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 before making any loan or giving any guarantee or providing any security under the section. |
| 25. | Loan and investment by company Section 186 of Chapter XII |
Exemption subject to Shall not apply to –
|
| 26. | Related Party Transaction First and second proviso section 188 (1) of Chapter XII |
Exemption subject to The provisions related to shareholders approval and participation by related party shall not apply to —
|
| 27. | Appointment of managing director whole-time director or manager Section 196 (2) (4) (5) of Chapter XIII |
Exemption The provisions related to term of appointment , compliance of schedule V along with approval of shareholders with respect to appointment shall not apply. |
| 28. | Overall maximum managerial Remuneration and managerial Remuneration in case of absence or inadequacy of profits Section 197 of Chapter XIII |
Exemption Shall not apply. |
| 29. | Appointment of key managerial personnel Section 203 (1) (2) (3) & (4) of Chapter XIII |
Adaption of new proviso after sec 203 (4) After sub-section (4), the following sub-section shall be inserted, namely: “(4A) The provisions of sub-sections (1), (2), (3) and (4) of this section shall not apply to a managing director or Chief Executive Officer or manager and in their absence, a wholetime director of the Government Company.” |
| 30. | Offences to be non cognizable Section 439 (2) of Chapter XXIX |
Modification in sec 439 (2) In sub-section (2). the words “the Registrar, a shareholder of the company, or of’ shall be omitted. Existing sec 439 (2) (2) No court shall take cognizance of any offence under this Act which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, a shareholder of the company, or of a person authorised by the Central Government in that behalf: |
4. Nidhi Company
| S. No. | Provisions of the Companies Act, 2013 | Exceptions, modifications and adaptations |
| 1. | Service of documents Section 20(2) |
Modification Shall apply subject to the modification that in the case of a Nidhi, the document may be served only on members who hold shares of more than one thousand rupees in face value or more than one per cent, of the total paid-up share capital of the Nidhis whichever is less. For other shareholders, document may be served by a public notice in newspaper circulated in the district where the Registered Office of the Nidhi is situated; and publication of the same on the notice board of the Nidhi. |
| 2. | Offer or invitation for subscription of securities on private placement Section 42 except subsection (1), explanation (II) to sub-section (2), sub-sections (4), (6), (8), (9) and (10) |
Exemption Shall not apply |
| 3. | Voting rights Section 47(1) (b) |
Modification Shall apply, subject to the modification that no member shall exercise voting rights on poll in excess of five per cent, of total voting rights of equity shareholders. |
| 4. | Further issue of share capital Section 62 |
Exemption Shall not apply. |
| 5. | Restrictions on purchase by company or giving of loans by it for purchase of its shares Section 67 |
Exemption subject to Shall not apply, when shares are purchased by the company from a member on his ceasing to be a depositor or borrower and it shall not be considered as reduction of capital under section 66 of the Companies Act, 2013. |
| 6. | Declaration of dividend Section 123(5) |
Modification The provisions related to payment divided to only registered shareholder shall apply, subject to the modification that any dividend payable in cash may be paid by crediting the same to the account of the member, if the dividend is not claimed within 30 days from the date of declaration of the dividend. |
| 7. | Punishment for failure to Distribute dividends Section 127 |
Modification Shall apply, subject to the modification that where the dividend payable to a member is one hundred rupees or less, it shall be sufficient compliance of the provisions of the section, if the declaration of dividend is announced in the local language in one local newspaper of wide circulation and announcement of the said declaration is also displayed on the notice board of the Nidhis for at least three months. |
| 8. | Right of member to copies of audited Financial statement Section 136(1) |
Modification Shall apply, subject to the modification that, in the case of members who do not individually or jointly hold shares of more than one thousand rupees in face value or more than one per cent, of the total paid-up share capital whichever is less, it shall be sufficient compliance with the provisions of the section if an intimation is sent by public notice in newspaper circulated in the district in which the Registered Office of the Nidhi is situated stating the date, time and venue of Annual General Meeting and the financial statement with its enclosures can be inspected at the registered office of the company, and the financial statement with enclosures are affixed in the Notice Board of the company and a member is entitled to vote either in person or through proxy. |
| 9. | Right of persons other than retiring directors to stand for Directorship. Section 160 |
Modification in sec 160(1) In sub-section (1), for the words "one lakh rupees", the words "ten thousand rupees" shall be substituted. Existing sec 160(1) A person who is not a retiring director in terms of section 152 shall, subject to the provisions of this Act, be eligible for appointment to the office of a director at any general meeting, if he, or some member intending to propose him as a director, has, not less than fourteen days before the meeting, left at the registered office of the company, a notice in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office, along with the deposit of one lakh rupees or such higher amount as may be prescribed which shall be refunded to such person or, as the case may be, to the member, if the person proposed gets elected as a director or gets more than twenty-five per cent. of total valid votes cast either on show of hands or on poll on such resolution. |
| 10. | Loan to Directors etc. Section 185 |
Exemption subject to Shall not apply, provided the loan is given to a director or his relative in their capacity as members and such transaction is disclosed in the annual accounts by a note. |
| 11. | Overall maximum managerial Remuneration and managerial Remuneration in case of absence or inadequacy of profits Second proviso of section 197(1) |
Modification Shall apply with the modification that the remuneration of a director who is neither managing director nor wholetime director or manager for performing special services to the Nidhis specified in the articles of association may be paid by way of monthly payment subject to the approval of the company in general meeting and also to the provisions of section 197 : Provided that no approval of the company in general meeting shall be required where,—
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| 12. | Fee for filing, etc. Section 403 |
Modification Shall apply, with the modification that the filling fees in respect of every return of allotment under sub-section (9) of section 42 shall be calculated at the rate of one rupee for every one hundred rupees or parts thereof on the face value of the shares included in the return but shall not exceed the amount of normal filing fee p payable. |