A quick perusal of the Companies Bill 2013 shows that
many exemptions given to Private limited companies
under Companies Act are withdrawn. The following
provisions are applicable to Private limited companies
under the new Companies Bill 2013.
Section 68(2):
Maximum Number of members
There is no change in the minimum number of
member which is 2. The maximum number the
members in a private limited company are
increased from 50 members to 200
members. Clause 2 sub section (68)).
CS Deepak P. Singh 9920830041
Financial Year for the Balance Sheet
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Financial year of the balance sheet
will be 31st march for all the
companies.
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For any relaxation approval from NCLT is
required. (Clause 2 sub section (41)).
CS Deepak P. Singh 9920830041
Further Issue of Shares
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The exemption given to private limited
companies regarding further issue of
shares is withdrawn. Further issue of
shares under section 81 applicable to
both private and public
limitedcompanies. Valuation of
shares shall be done based on
the certificate issued by registered valuer
subject to such conditions as may be
prescribed. (Clause 62)
CS Deepak P. Singh 9920830041
Certification for Annual Return
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Annual Return must be certified by a Practicing
company secretary and requirement ofcompliance
certificate by practicing company secretary is dispensed
with. The annual return should contain particulars like:
(a) The extract of the annual return as provided under
sub-section (3) of sec 92.
(b) Number of meetings of the Board.
(c) Directors’ Responsibility Statement;
(d) A statement on declaration given by independent
directors under sub-section.
And also PCS to certify that all the provisions of the
Companies Act has been complied with(Clause 92)
CS Deepak P. Singh 9920830041
Number of days of Notice of General Meetings.
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For private limited company as per the existing
Companies Act is even seven days notice is
sufficient. This exemption is withdrawn. As per
the New Provisions 21 clear days notice has
to be given to the shareholders and the notice
can be given by electronic mode also. However
the general meeting may be convened by giving
shorter notice if consent is given in writing or
electronic mode by not less than ninety nine per
cent of the members entitled to vote at such
meeting. (Clause 101).
CS Deepak P. Singh 9920830041
Postal ballot for passing the
Resolutions

Till now postal ballot is applicable only for
listed companies. Postal ballot is
applicable to private limited companies
also for certain transactions after
the amendment prescribed by the central
government by notification. (Clause
110).
CS Deepak P. Singh 9920830041
Board Report to give more details
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The Board report shall contain the following information
(Clause 134(3)) —
(a) The extract of the annual return
(b) Number of meetings of the Board;
(c) Directors’ Responsibility Statement;
(d) a statement on declaration given by independent
directors
(e) Company’s policy on directors’ appointment and
remuneration including criteria for determining
qualifications, positive attributes, independence of a
director and other matters if required by Section 178
provided under sub- section (3) of section 178;
CS Deepak P. Singh 9920830041
Board Report to give more details Continues--
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(f) Explanations or comments by the Board on every
qualification, reservation or adverse remark or disclaimer made—
(i) by the auditor in his report; and
(ii) by the company secretary in practice in his secretarial
audit report;
(g) Particulars of loans, guarantee s or investments
(h) Particulars of contracts or arrangements with related
parties referred to in sub-section (1) of section 188 in the
prescribed form;
(i) The state of the company’s affairs;
(j) The amounts, if any, which it proposes to carry to any reserves;
(k) The amount, if any, which it recommends should be paid by
way of dividend;
CS Deepak P. Singh 9920830041
Board Report to give more details Continues--
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(l) Material changes and commitments, if any, affecting the
financial position of the company which have occurred between the end
of the financial year of the company to which the financial statements
relate and the date of the report;
(m) The conservation of energy, technology absorption, foreign Exchange
earnings and outgo, in such manner as may be prescribed;
(n) a statement indicating development and implementation of a
risk management policy for the company including identification therein
of elements of risk, if any, which in the opinion of the Board may threaten
the existence of the company;
(o) The details about the policy developed and implemented by
the Company on corporate social responsibility initiatives taken during the
year;
(p) In case of a listed company and every other public company having
such paid-up share capital as may be prescribed, a statement indicating
the manner in which formal annual evaluation has been made by the
Board of its own performance and that of its committees and individual
directors;
(q) Such other matters as may be prescribed.
CS Deepak P. Singh 9920830041
Corporate Social Responsibility.

Every company having net worth of rupees five hundred
crore or more, turnover of rupees one thousand crore or
more or a net profit of rupees five crore or more during
any financial year shall constitute a Corporate Social
Responsibility (CSR) Committee of Board consisting of
three or more directors, out of which at least one
director shall be an independent director and 2 per cent
of the average net profits of the immediately preceding
three financial years should be spent for CSR (Clause
135). Schedule VII prescribes the activities to be
included under Corporate Social Responsibility which is
given below:
CS Deepak P. Singh 9920830041
Corporate Social Responsibility Continues-----
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SCHEDULE VII
Activities which may be included by companies in their Corporate Social Responsibility
Policies Activities relating to:—
(i) Eradicating extreme hunger and poverty;
(ii) Promotion of education;
(iii) Promoting gender equality and empowering women;
(iv) Reducing child morality and improving maternal health;
(v) Combating human immunodeficiency virus, acquired immune deficiency
syndrome, malaria and other diseases;
(vi) Ensuring environmental sustainability;
(vii) Employment enhancing vocational skills;
(viii) Social business projects;
(ix) Contribution to the Prime Minister’s National Relief Fund or any other fund set up
by the Central Government or the State Governments for socio-economic
development and relief and funds for the welfare of the Scheduled Castes, the
Scheduled Tribes, other backward classes, minorities and women; and
(x) such other matters as may be prescribed.
CS Deepak P. Singh 9920830041
Appointment of Auditors
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A. An auditor will be appointed in the first annual general meeting
for a five-year term. Thereafter, the auditor will be changed as per
the members’ decisions.
B. Secondly, an audit firm cannot be re-appointed for more than two
five-year terms. (i.e. 10 years) For re-appointment purposes for the
individual auditor or audit firm, there has to be a gap of five years.
Moreover, for appointment or re-appointment purposes, there
should be no common partnersbetween the new firm and old
audit firm. Another interesting clause is that members can resolve to
ask the audit firm to rotate the audit partner and team every year.
The company shall inform the auditor concerned of his or its
appointment, and also file a notice of such appointment with the
Register within fifteen days of the meeting in which the auditor is
appointed. Every company shall comply with the requirements of
this sub-section within three years from the date of commencement
of this Act. (Clause 139)
CS Deepak P. Singh 9920830041
Appointment of Internal Auditor
Such class or classes of companies as may
be prescribed shall be required to appoint
an internal auditor, who shall either be a
Chartered Accountant or a Cost
Accountant or such other professionals as
may be decided by the Board conduct
internal audit of the functions and
activities of the company. (Clause 138).
CS Deepak P. Singh 9920830041
Duties of Directors
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A director of a company shall act in good faith
in order to promote the object of the
company.
A director of a company shall exercise his
duties with due care, skill and diligence.
A Director of a company shall not assign his
office and any assignments so made shall be
void.
If a director of the company contravenes
the provisions of this section such director
shall be punishable with fine which shall not be
less than Rs.1, 00,000/- but which may extend
to Rs.5, 00,000/- (Clause 166).
CS Deepak P. Singh 9920830041
Borrowing Powers
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The exemption given to private limited
company for borrowings under section.293
is withdrawn. Borrowing powers now
require approval by shareholders and
applicable to both private and public
limited companies. (Clause 180).
CS Deepak P. Singh 9920830041
Loan and Investment
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The exemption given to private limited
company under Section 372A regarding
loan and investment is
withdrawn. Existing limit of 60% Paid up
capital and free reserves or 100% of free
reserves applicable to both private limited
and public limited companies.(Exemption
to private limited Company for loan and
investment under section372A is
removed now) (Clause 186).
CS Deepak P. Singh 9920830041
Related party Transactions
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Only with the consent of the Board of Directors given by a resolution at a
meeting of the Board and subject to such conditions as may be
prescribed no company shall enter into any contract or arrangement with
a related party
with respect to—
(a) Sale, purchase or supply of any goods or materials;
(b) Selling or otherwise disposing of, or buying, property of any kind;
(c) Leasing of property of any kind;
(d) Availing or rendering of any services;
(e) Appointment of any agent for purchase or sale of goods,
materials, services or product.
(f) Such related party’s appointment to any office or place of profit in the
company, or its subsidiary company or associate company.
No contract or arrangement, in the case of a company having a paidup share capital of not less than such amount, or transactions not
exceeding such sums, as may be prescribed, shall not be entered into
except with the prior approval of the company by a special resolution.
Further that no member of the company shall not vote on such
special resolution to approve any contract or arrangement which may be
entered into by the company, if such member is a related party.(Clause
188).
CS Deepak P. Singh 9920830041
Loan to Directors
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The exemption given to the Private
Limited Company under section 295
regarding loan given to director of a
private limited of company is withdrawn.
Loan should not be given to directors of
any company including private limited
company or to any private company in
which a director is a director or
member (Clause 185).
CS Deepak P. Singh 9920830041
Appointment of Key Managerial
Personnel
Appointment of Key Managerial Personnel –
Every company belonging to such
class or
description of companies as may be prescribed
shall have the following whole time Key
Managerial Personnel (Clause 203).
 1. Managing Director or Chief Executive Officer
or Manager and in their absence a Whole Time
Director.
 2. Company Secretary and;
 3. Chief Financial Officer.
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CS Deepak P. Singh 9920830041
Secretarial Audit Report
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Every listed company and company
belonging to other class of companies as
may be prescribed shall annex with its
Board’s report a secretarial audit report
given by Practicing Company Secretary in
such form as may be prescribed. (Clause
204).
CS Deepak P. Singh 9920830041
Director to stay in India for 182
days
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Every company shall have at least one director
who has stayed in India for a total period of not
less than one hundred and eighty-two days in
the previous calendar year. Every company
existing on or before the date of commencement
of this Act shall, within one year from such
commencement or from the date of notification
of the rules in this regard as may be applicable,
comply with the requirements of this provision
(Clause 149(3)).
CS Deepak P. Singh 9920830041
Board and Annual General
Meeting minutes
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Hereafter the companies shall follow the
Secretarial Standards while making the
minutes of Board and General Meeting.
(Clause 118 (10))
CS Deepak P. Singh 9920830041
Books of Accounts
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The Books of Accounts may be kept
in electronic form also. (Clause 128)
CS Deepak P. Singh 9920830041
Managing Director.
The exemption given to private limited company
under section 269 for appointment of Managing
Director is withdrawn. Provision relating to the
appointment of Managing Director is also
applicable to the private limited companies
(Clause 196).
 In addition to the above Clause 190 of the
Companies Bill 2013 regarding keeping of
Contracts of employment entered with
wholetime directors is not applicable to Private
Limited Companies.
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CS Deepak P. Singh 9920830041
Need for Amendment of Articles of Association of private
limited company:
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Sec 171 to 186 sections which are not applicable to
Private Limited companies is now deleted in the
Companies Bill. Hence, after Companies Act, 2013,
comes into effect, it may require to amend the article of
association of Private Limited by substituting the new set
of article of association so that it will not contain any
contrary provision of the Companies Act, 2013.
A comparison is made with respect to exemptions given
in the Companies Act, 1956 and new Companies Bill
2013. The following are the exemptions available to
Private Limited Companies in Companies Act 1956 and
its status in New Companies Act 2013.
CS Deepak P. Singh 9920830041
Some privileges deleted by the new act:
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Companies Act, 1956
Section 77(2) Financial
assistance can be given
for purchase of or
subscribing for its own
shares in its holding
company, Whereas not
applicable to Public
company
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Companies Act,2013
Clause 67 – Restrictions
on purchase by Company
or giving of loans by it for
purchase of its shares.
Private limited company
not specifically mentioned
in the clause. Hence
exemption is available.
CS Deepak P. Singh 9920830041
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Section 81(3) Further
shares can be issued
without passing
special resolution or
obtaining central
government’s
approval and without
offering the same
necessarily to existing
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Clause 62 – Further
issue of shares now
applicable to Private
limited Company
also.Exemption is
withdrawn.
CS Deepak P. Singh 9920830041
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Section 149(7)
Exemption from
Certificate of
Commencement of
business
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Clause 11 –
Commencement of
business declaration
has to be filed by
Private Limited
Company.Exemption
is withdrawn.
CS Deepak P. Singh 9920830041
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Section 198(1) No
restriction on the
payment of
Managerial
Remuneration on net
profits
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Clause 197 – Overall
maximum managerial
remuneration
applicable to Public
Company. For Private
Limited Company this
section is not
applicable.Exemptio
n is withdrawn.
CS Deepak P. Singh 9920830041
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Section 252(2) Need
not have more than
two directors
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Clause 149 –
Minimum two
directors. There is no
change in the existing
provisions. Exemption
continues.
CS Deepak P. Singh 9920830041
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Section 255(1) A
proportion of
directors need not
retire every year
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Clause 152 – The
exemption continues
but as per the AOA of
the Company.
CS Deepak P. Singh 9920830041
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Section 257(2)
Statutory notice, etc.,
is not required for a
person to stand for
election as a director
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Clause 160 –
Exemption is
withdrawn.
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CS Deepak P. Singh 9920830041
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Section 259 Central
Government’s
sanction is not
required to affect
increase in the
number of directors
beyond 12 or the
number fixed by
articles of association
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Clause 149 – The
Company to have
Board of Directors.
Exemption given now
to maximum of 15
Directors.
CS Deepak P. Singh 9920830041
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Section 263(1) In passing
resolution for election of
directors, all directors can
be appointed by a single
resolution
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Clause 162 –
Appointment of directors
to be voted
individually.Exemption
is withdrawn. Single
resolution for the
appointment of directors
can be passed both by
private and public
company provided, a
proposal to move such a
motion has first been
agreed to at the meeting
without any votebeing
cast against it.
CS Deepak P. Singh 9920830041
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Section 264(3)
Consent to act as
director need not be
filled with registrar
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Clause 152 –
Appointment of
directors. Exemption
removed. Private
Limited Companies
also to file
consent.Exemption
is withdrawn.
CS Deepak P. Singh 9920830041
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Section 269(2)
Central Government’s
approval is not
required for
appointment of
managing or wholetime director or
manager
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Central Government’s
approval is not
required for
appointment of
managing or wholetime director or
manager
CS Deepak P. Singh 9920830041
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Section 275 to 279
Restrictive provisions
regarding total number of
directorships which any
person may hold do not
include directorships held
in private companies
which are not subsidiary
of public company
Clause 165 – The
maximum number of
companies in which a
director can hold office is
20 companies. Out of this
he can hold only up to 10
public companies. There
is no restriction for
private limited
directorships held in
private companies which
are not subsidiary of
public company
CS Deepak P. Singh 9920830041
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Section 293(1)
Certain restrictions on
powers of board of
directors do not apply
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Clause 180 –
Exemption is
withdrawn.
CS Deepak P. Singh 9920830041
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Section 295(2)
Prohibition against
loans to directors
does not apply
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Clause 185 –
Exemption is
withdrawn. Loan to
directors applicable to
private limited
company
CS Deepak P. Singh 9920830041
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Section 300(2)
Prohibition against
participation in board
meetings by
interested director
does not apply
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Clause 184 –
Exemption is
withdrawn.Disclosur
e of directors
interested applicable
to private limited
company.
CS Deepak P. Singh 9920830041
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Section 303(1) Date
of birth of director
need not be entered
in the register of
directors
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Clause 170 – Register
of directors and key
managerial personnel
and their
shareholding.
Exemption is
withdrawn. Anybody
can view the
particulars of the
directors through
their DIN numbers.
CS Deepak P. Singh 9920830041
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Section 309(9) There
is no restriction on
remuneration payable
to directors
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Clause 197 – Overall
maximum managerial
remuneration
applicable to Public
Company. For Private
Limited Company this
section is not
applicable. Exemption
continues.
CS Deepak P. Singh 9920830041
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Section 316(1) No
restriction on
appointment of
managing director
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Clause 203 –
Appointment of Key
Managerial
Personnel.Exemption is
withdrawn.
CS Deepak P. Singh 9920830041
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Section 349 Provisions  Clause 198 –
relating to method of
Calculation of
determination of net
Profits.Exemption is
profits and
withdrawn.
ascertainment of
depreciation do not
apply
CS Deepak P. Singh 9920830041
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Section 372(A) No
prohibition against
purchase of shares,
etc., in other
companies
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Clause 186 –
Exemption is
withdrawn.
Applicable to Private
Limited Companies
CS Deepak P. Singh 9920830041
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Rules regarding provisions of New
Companies Act, 2013 has not been
specified by the MCA. Only Rules
regarding Sections 1 to 98 have been
prescribed and effective from 12th
September, 2013.
CS Deepak P. Singh 9920830041
THANK
CS Deepak P. Singh 9920830041
YOU