AMENDED POINTERS FOR ANNUAL FILING FOR YEAR ENDED 2021

Hello Readers!

We all are aware that Ministry of Corporate Affairs (MCA), always comes up with various amendments in various provisions of Companies Act. Now the Ministry has amended Companies (Management and Administration), Rules, 2014. As per the recent amendment followed by the Union Budget, 2021, there has been changes in the definition of Small Companies under Section 2(85) of the Companies Act, 2013. Further, there has been changes in the definition and threshold limits of One Person Company. Let’s discuss the amendments one-by-one.

 

As per Companies Act, 2013, “Small Company” means a company, other than a public company, having-

1. Paid-up share capital of which does not exceed Rs. 50 Lakhs or such higher amount as may be prescribed which shall not be more than Rs. 10 Crores; and

2. Turnover as per the profit and loss account which does not exceed Rs. 2 Crores or such higher amount as may be prescribed which shall not be more than Rs. 100 Crores.

Provided that nothing in this clause shall apply to-

1. Holding Company, or a Subsidiary Company

2. A company Registered under Section 8.

3. A company or a body corporate as governed by the special act.


But, as per the recent amendment, the definition of Small Company shall be read as follows: 

“Small Companies” means a company other than a public company, having-

1. Paid up Share capital of which does not exceed Rs. 2 Crores or such higher amount as may be prescribed which shall not be more than Rs. 10 Crores; and

2. Turnover as per the Profit and Loss Account which does not exceed Rs. 20 Crores or such higher amount as may be prescribed which shall not more than Rs. 100 Crores.

Provided that nothing in this clause shall apply to-

1. Holding Company, or a Subsidiary Company

2. A company Registered under Section 8

3. A company or a body corporate as governed by the special act.

In the same Union Budget, 2021, Finance Minister Mrs. Nirmala Sitharaman has also amended the definition of One Person Company by easing the restrictions imposed on One Person Companies (OPCs). Thus, under earlier regime, the threshold limits for forming One Person Company were read as:

 A person desirous of forming One Person Company has to adhere to certain threshold limits which are enumerated as follows:

1. Paid-Up share capital of Rs. 50 Crores, or

2. Average Turnover of Rs. 2 Crore

during the three consecutive previous financial years.

Under Companies (Incorporation) Second Amendment Rules, 2021 dated 1st February, 2021 applicable w.e.f 1st April, 2021, the threshold limits for forming One Person Company are done away with. That means the threshold limits are completely removed.

 

CONDITIONS FOR FORMING ONE PERSON COMPANY

Only natural person can form One Person Company i.e. A person resident in India and an Indian Citizen. Further, the number of days for calculating the status of person resident in India shall be One Hundred and Eighty-two Days (182 days).

But, under the Companies (Incorporation) Second Amendment Rules, 2021 dated 1st February, 2021 w.e.f. 1st April, 2021 following are the amended conditions:

1. Only natural person can form One Person Company.

2. A person Resident in India or otherwise.

Further, the number of days for calculating residential status are reduced from One Hundred and Eighty-Two days (182 days) to One Hundred and Twenty Days (120 days).

After these beneficial changes in Small Companies and One Person Companies, the Ministry has further amended Rule 11 of Companies (Management and Administration) Rules, 2014, by substituting sub rule (1) namely;

1. Every Company shall file its annual return in Form MGT-7 except One Person Company (OPC) and Small Companies. One Person Companies and Small Companies shall file its Annual Return from the Financial Year 2020-2021 onwards in Form MGT-7A”.

Further, the Ministry has also amended Rule 12 of the Companies (Management and Administration) Rules, 2014, in sub-rule (1) the following proviso shall be inserted:

“A copy of Annual Return shall be filed with the Registrar with such fees as may be specified for this purpose”.  

The above amendment came into effect from 05th March, 2021.

Thus, it can be concluded that attaching extract of annual return with Boards Report in Form MGT-9 is completely omitted.

 

References:

1.      https://www.mca.gov.in/Ministry/pdf/SpecificationAmndtRules_02022021.pdf

2.      https://www.mca.gov.in/Ministry/pdf/SecondAmndtRules_02022021.pdf

3.      https://www.mca.gov.in/Ministry/pdf/CompaniesMgmtAdminAmndtRules_05032021.pdf

 


Comments

  1. riya somaniAugust 4, 2022 at 4:50 PM

    Thank you for sharing this Informative blog with us. This is very helpful to know about the corporate compliance solutions .

    ReplyDelete

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