SHORT NOTE
Small Company under Clause (85) of Section 2 of Companies Act, 2013
Till 31st March, 2021 From 1st April, 2021
Notification dated: 1st February,2021
Paid up share capital Paid up share capital
not more than 50 lakhs not more than 2 crores
and and
Annual turnover Annual turnover
not more than 2 crores not more than 20 crores
In the immediately preceding financial year In the immediately preceding financial year
EXCEPT
1. Public Company 2. Section 8 company
3. Holding/subsidiary company 4. Company governed by any Special Act
1. TWO board meetings in a calendar year--- in each half of the calendar year--- with a minimum gap of ninety days between the two meetings.
2. Rotation of auditors every 5 years (individual auditors) and every 10 years (firm of auditors)
3. No need to disclose Matters to be included in Board’s Report mention in Rule -8 of companies (Accounts) Rules, 2014.
4. Annual Return of a Small Company can be signed by the company secretary alone, or where there is no company secretary, by a single director of the company.
5. Only “aggregate amount of remuneration drawn by directors” is required to mention in annual return under section 92.
6. No need of Cash Flow Statement.
7. No need to give report on internal financial controls with reference to financial statements and the operating effectiveness of such controls in audit report.
8. Penalty shall not be more than one-half of the penalty specified in any provisions Subject to a maximum of two lakh rupees in case of a company And one lakh rupees in case of an officer who is in default or any other person, as the case may be.
**The status of a company as “Small Company” may change from year to year. Thus the benefits which are available during a particular year may stand withdrawn in the next year and become available again in the subsequent year.
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