EXEMPTION TO SECTION 8 COMPANIES - Notification 13.06.2017


        EXEMPTION TO SECTION8        COMPANIES - Notification 13.06.2017

SHORT SUMMARY:

In this Flash editorial, the author begins by referring the powers of central government providing under Section 462 of Companies Act, 2013. The Central Government, in the interest of public, hereby amends the notification of the Government of india, in the Ministry of Corporate Affairs, vide number G.S.R. 464(E) dated the 5th June, 2015 published in the Gazette of India, Extraordinary, Part-ll, Section 3, Subsection (i), dated the 5rh June 2015 (hereinafter referred to as the principal notification), namely:
This is article no. 234 of the series of editorials written by the author on corporate laws {Including Companies Act, 2013, SEBI, RBI Regulations, IBC, LLP Act, 2008 etc.}.

INTRODUCTION:

Ministry of Corporate Affairs On 5th June, 2015 lay down exemption to Section 8 Company from some the provision of the Companies Act, 2013. According to the exemptions Provisions of companies act, 2013 given in principle notification shall not apply or shall apply with such exceptions, modifications and adaptations, as specified in the principle notification.  (Link of principle Notification
MCA has laid down the copy of the Notification under section 462 of the Companies Act 2013 (“the Act”) providing some more exemptions to Section 8 Company from the provisions of the Companies Act, 2013 in addition to the exemption notification dated 5th June, 2015.
New Exemption in addition to earlier exemption- By Notification on 13th June, 2017
MCA lay down below given exemption to Section 8 Companies from the provision of the Companies Act, 2013.

S.N
Chapter/ Section of the Act
Particular

Exemption Provided in MCA Notification
A.     
Clause (b) and first proviso (1) of Section 149
In the exemption notification dated 5th June, 2015, in the table, for serial number 8 , the following serial no. shall be Substituted, namely:-


149. (1) Every company shall have a Board of Directors consisting of individuals as directors and shall have—
(b) a maximum of fifteen directors:
This clause shall not apply to the Section 8 Company.
B.      
Sub Section (7) of section 186
[1]186(7) (7) No loan shall be given under this section at a rate of interest lower than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan.

Addition of Proviso after sub section 7
Provided that nothing contained in this sub-section shall apply to a company in which twenty-six per cent. or more of the paid-up share capital is held by the Central Government or one or more State Governments or both, in respect of loans provided by such company for funding Industrial Research and Development projects in furtherance of its objects as stated in its memorandum of association.".
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.



[1] The exceptions, modifications and adoptions provided in column (B) of the aforesaid table shall be applicable to a Government Company which has not committed a default in filing its financial statements under Section 137 of the said Act or annual return under section 92 of the said Act with the Registrar.

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