Reduction of cost of compliance for
companies
1.
appointment
of Whole Time Company Secretary**
MCA
has increased the requirement of paid up capital from rupees 5 crore to rupees
10 crore for appointment of Whole Time Company Secretary vide Companies
(Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020,
2.
Incorporation
cost
Registration
fee for incorporation of Companies with authorized capital of up to Rs. 15 lakh
has been reduced to Zero by the Companies (Incorporation) Second Amendment
Rules, 2019.
MCA has reduced cost of compliance for small
companies which is defined under section 2(85) of the companies Act, 2013 and
also for private companies (Start Up) from complying with various provision of
Companies Act which are as under:
·
A private company which is a startup /small companies are not
required to include cash flow statement with financial statements which
otherwise is a mandatory.
·
A private company which is a startup /small companies, Annual
return shall be signed by the company secretary or where there is no company
secretary, by the director of the company.
·
A private company which is a startup /small companies, One board
meeting in each half of a calendar year with gap between two meetings of not
less than 90 days is sufficient to comply with the requirement of section
173(5) of the Companies Act as against the earlier requirement meeting at least
once in 120 days and hold a minimum of 04 board meetings in a year.
·
Small companies are
exempted from producing certification form practicing professionals, under
various provisions of the Act, 2013 r.w rule 12 (a) of the Companies
(Registration Offices and Fees) Rules, 2014,
·
Small companies can approach Regional Director for corporate
mergers, arrangements etc. instead of National Company Law Tribunal (NCLT),
·
Lesser penalties are applicable for small companies, one person
companies for certain contravention under section 446 B of the Companies Act,
2013
Small
companies are given certain concessions/rebates on fee payable on applications
(including appeal) made to Central Government under Section 459 (2) of the
Companies Act, 2013.
Disclaimer:
IN NO EVENT THE AUTHOR SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM OR ARISING OUT OF OR IN CONNECTION WITH THE USE OF THIS INFORMATION.
Author Views:
**Appointment
of Company Secretary as stated above shall not be treated as Compliance burden.
A company secretary is essentially responsible for all the company
administration.
A
company secretary plays a largely supportive role, taking care of important
tasks such as general administration, shareholder communication, corporate
governance, and statutory compliance/filing of accounts. In short, the
secretary acts as a bridge between the company, the shareholders and Companies
House, ensuring all the relevant information is shared in compliance, on time
and efficiently.
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