Threshold Limit for Compliances, Companies Act 2013

Last Updated On: Jan. 14, 2021, 9:28 p.m.
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THRESHOLD LIMITS FOR COMPLIANCES COMPANIES ACT,2013

Every company incorporated under the provisions of the Act is required to adhere to. There are some compliances whose applicability depends on the type of Company, paid-up capital, turnover, etc.

Below is the table which gives a gist of all such companies.

 

Sl.No Particulars    
1 Annual Return Certification

Sec 92

Format MGT 8

The Annual return of the following companies shall be certified by a PCS:

A. Every Listed Company; or

B. Every Company with a

i. paid-up capital of Rs. 10 Crores or more; or

ii. Turnover of Rs. 50 Crores or more.
2 Constitution of Corporate Social Responsibility Committee Composition: 3 or more Directors with at least 1 Independent Director However, if a Co is not required to appoint ID, CSR Committee shall consist of 2 or more Directors

Sec 135

Rule 5 of the Companies (Corporate Social Responsibility) Rules 2014

Every Company with 

i. The net worth of Rs. 500 Crores or more; or

ii. Turnover of Rs.1000 Crores or more; or

iii. Net Profit of Rs. 5 Crores or more.
4. Filing of Accounts in XBRL Mode

Sec 137

Rule 12 of the Companies (Accounts)
Rules 2014

Rule 3 of Companies (filing of documents and Forms in XBRL) Rules
2015

The following classes of companies shall file their Financial Statements with ROC in XBRL

i. Listed Companies and their Indian subsidiaries; or

ii. companies having paid up capital of Rs. 5 Crores or above; or

iii. companies having turnover of Rs.100 Crores or above; or

iv. all companies which are required to prepare their financial statements in accordance with Companies (Indian Accounting Standards) Rules, 2015
5.

Appointment of Internal Auditor

 

Sec 138

Rule 13 of The Companies (Accounts)Rules 2014

A. Every Listed Co

B. Every Unlisted Co with

i. Paid up capital of Rs. 50 Crores or more during the preceding FY; or

ii. Turnover of Rs.200 Crores or more during the preceding FY; or

iii. Outstanding Loans or borrowings from banks or PFI exceeding Rs. 100 Crores or more at any point of time during the preceding FY; or

iv. Outstanding deposits of Rs. 25 Crores or more at any point of time during the preceding FY

C. Every Private Co with

i. Turnover of Rs. 200 Crores or more during the preceding FY; or

ii. Outstanding loans and borrowings from banks or PFI exceeding Rs. 100 Crores or more at any point of time during the preceding FY
6. Rotation of Statutory Auditors

Sec 139

Rule 5 of the Companies (Audit and Auditors) Rules, 2014

The classes of companies as given herein below shall not appoint or re-appoint—

A. an individual as auditor for more than one term of 5 consecutive
years; and

B. an audit firm as auditor for more than 2 terms of 5 consecutive years

i. Every Listed Company

ii. All unlisted public companies having paid-up share capital of Rs.10 Crores or more;

iii. All private limited companies having paid-up share capital of RS.50 Crores or more;

iv. All companies having paid-up share capital of below
threshold limit mentioned in (i) and (ii) above, but having public borrowings from financial institutions, banks or public deposits of Rs.50 Crores or more.

Cooling period: 5years from the completion of the term

7. The Companies (Auditor’s Report) Order (CARO)

Sec 143

Rule 1 the Companies (Auditor’s report) Rules 2020

All companies except the following:

A. A banking co;

B. An insurance Co;

C. A section 8 Co;

D. One-person co;

E. Small co;

F. Private limited

i. which is not a holding or a subsidiary Co of a public co; or

ii. whose paid-up capital and reserves and surplus are not more than Rs. 1 Crore as on balance sheet date; or

All companies except the following:

A. A banking co;

B. An insurance Co;

C. A section 8 Co;

D. One-person co;

E. Small co;

F. Private limited

i. which is not a holding or a subsidiary Co of a public co; or

ii. whose paid-up capital and reserves and surplus are not more than Rs. 1 Crore as on balance sheet date; or

iii. which does not have total borrowings exceeding Rs. 1 Crore from any bank or financial institution at any point of time during the financial year; or

iv. which does not have a total revenue of Rs. 10 Crores during the FY

8.

Cost Audit

Sec 148

Rule 3 of the Companies (Cost Records and Audit) Rules, 2014

Companies who are required to keep Cost Records, undergo a Cost Audit, and submit Cost Audit Report, in two separate sections defined by

1. Table A, which covers regulated sectors dealing with specified goods/services and

i. Overall annual total turnover from all products/services is Rs. 50 Crore or more.

ii. Aggregate turnover from the individual product/service is Rs. 25 Crore or more.

1. Table B which covers non regulated sectors dealing with specified goods/services and

i. Overall annual total turnover from all products/services is Rs.100 Crore or more.

ii. Aggregate turnover from the individual product/service is Rs.35 Crore or more.

 However, companies covered by above rules are exempted from conducting a cost record audit if any of the following situations arise:

1. The company’s export revenue in foreign exchange exceeds 75% of total revenue

2. Company operates from a Special Economic Zone (SEZ)

3. Company is engaged in the production of electricity through Captive Generating Plant

9. Appointment of Independent Director

Sec 149

Rule 4 of the Companies (Appointment & Qualifications of Directors) Rules 2014

A. Every Listed Co shall have at least 1/3rd of the total Directors as Independent.

B. Every Public Company shall have two Independent Directors for the following classes:

i. Paid-up capital of more than Rs. 10 Crores or more; or

ii. Turnover of Rs. 100 Crores or more; or

iii. Aggregate outstanding loans, debentures, deposits, exceeding Rs. 50 Crores.

10. Appointment of Woman Director

Sec 149

Rule 3 of the Companies (Appointment and Qualifications of Directors) Rules, 2014

A. Every listed company; B. Every other public company having –

i. paid-up share capital of Rs.100 Crores or more; or ii. turnover of Rs.300 Crores or more
11.

Constitution of Audit Committee

Composition: Min 3 Directors with Independent Directors forming a majority

Sec 177

Rule 6 The Companies (Meetings of Board and its powers) rules 2014

Rule 4 of the Companies (Appointment & Qualifications of Directors) Rules 2014

A. Every Listed Co shall have at least 1/3rd of the total Directors as Independent.

B. Every Public Company shall have two Independent Directors for the following classes:

i. Paid-up capital of more than Rs. 10 Crores or more; or

ii. Turnover of Rs. 100 Crores or more; or

iii. Aggregate outstanding loans, debentures, deposits, exceeding Rs. 50 Crores
12.

Vigil Mechanism

▪ Sec 177 ▪ Rule 7 of The Companies (Meetings of Board and its powers) rules 2014

i. Every Listed Company; or

ii. Companies That accept deposits; or

iii. Companies that have borrowings from banks/ PFI of Rs. 50 Crores or more.

Shall establish Vigil Mechanism for their directors and employees to report their genuine concerns or grievances

13. Constitution of Nomination and Remuneration Committee Composition: 3 or more Non-executive Directors of which at least ½ shall be Independent Directors.

Sec 178

Rule 6 The Companies (Meetings of Board and its powers) rules 2014

Rule 4 of the Companies (Appointment & Qualifications of Directors) Rules 2014

A. Every Listed Co shall have at least 1/3rd of the total Directors as Independent.

B. Every Public Company shall have two Independent Directors for the following classes:

i. Paid up capital of more than Rs. 10 Crores or more; or

ii. Turnover of Rs. 100 Crores or more; or

iii. Aggregate outstanding loans, debentures, deposits, exceeding Rs. 50 Crores.
14. Appointment of Key Managerial Personnel (KMP)

Sec 203

Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

A. Every listed company; or

B. every other public company having a paid-up share capital of Rs.10 Crores or more shall appoint the following Whole-time key managerial Personnel:

i. Managing Director or Chief Executive Officer or Manager or in their absence Whole Time Director; and

ii. Chief Financial Officer; and

iii. Company Secretary
15 Secretarial Audit

Sec 204

Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

Format: MR 3

i. Every Listed Company; or

ii. Every Public Company with a paid-up capital of Rs. 50 Crores or more; or

iii. Every Public Company with a turnover of Rs. 250 Crores or more; or

2. Every Company having outstanding loans or borrowings from banks/ PFI of Rs. 100 Crores or more

 

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