SMALL PVT LTD COMPANY - COMPLIANCE UNDER COMPANIES ACT 2013 - A READY RECKONER

 In the budget speech on 01 February 2021 Finance Minister has proposed to revise the threshold for determining a company as a “small company”.

The capital threshold will be Rs.2 Crores ( at present  50 lakhs )  and the turnover threshold will be Rs.20 Crores (at present 2 crores). If a company has more turnover and less capital or if a company has more capital and less turnover, still it will not enjoy the status of a small company.

Let's take the case of a private limited company which is within the thresholds and falls within the category of a small company and discuss up to what extent a small company is required to comply with provisions of the Companies Act, 2013 and connected rules,  as follows ;

Subject Matter	Provisions
Maximum Number of Directors limited to 15	Yes
DIN	Required
Disqualification of Directors	Applicable
Duties of Directors	Applicable
Retirement of Directors by Rotation	Not Required; unless Articles otherwise provide
Accepting Loans and Deposits from Directors	Permitted
Accepting Loans and Deposits from relatives of Directors	Permitted
Accepting Loans and Deposits from Shareholders	Permitted
Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal ) Act,2013	Required
Compliance of provisions on Related Party Transactions	Applicable
Disclosure of Interests by Directors	Required
Participation by Interested Directors	Permitted
Prohibition to granting loans to directors and relatives	Not Applicable unless the company’s borrowings are equal to or more than twice of its paid up share capital
CSR Provisions, CSR Policy, Disclosures of CSR Policy and CSR Committee	Will apply only if net profits are Rs.5 Crores or more in the immediately preceding financial year; in any case, if the amount to be spent should be Rs.50 Lakhs, the average net profits during the three immediately preceding financial years must be of the size of 25 Crores. Therefore, the question of constituting CSR Committee may not arise. If CSR provisions apply due to phenomenal net profits, CSR Policy must be there and the same must also be disclosed in the Board’ Report
Annual Return	Required
Board’s Report	Required; however only abridged version as per rule 8A of the Companies (Accounts) Rules, 2014.
Audited Financial Statements (AFS)	Required
Cash Flow Statements	Not Required
Consolidated Financial Statements	Not Required
AOC -1, statement containing salient features of subsidiary etc.,	Not Required; unless the company has any joint venture or associate company.
Particulars of Contracts and Arrangements with Related Parties to be included in the Board’s Report in form AOC-2	Required
Appointment of Auditors	Required
Accounting Standards	As would apply to small and medium sized companies
Register of Members	Required
Register of Directors	Required
Register of Loans, Guarantees etc.,	Required
Register of Investments	Required
Register of Contracts and Arrangements with Related Parties	Required
Registration of Charges	Required
Holding not less than 4 Board Meetings	Required
Annual General Meeting	Required
Secretarial Standards	Applicable
Requirement to Maintain Minutes of Board and General Meeting	Required
Passing of Board Resolutions by Circulation of Resolutions to Directors	Permitted
Exercising of Powers only at Board Meetings	Required
Filing of Special and other Resolutions with Registrar of Companies in MGT-14 other than those falling under Section 179(3) of the Act	Required