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Shambasiv (n/a)     04 October 2007

Companies Act

[font=""trebuchet ms""][color=black]Exemptions To Private Limited Companies[/color]

[font=""trebuchet ms""]1) Financial assistance can be given for the purchase of or subscribing for its own shares or shares in its holding company - Sec. 77 (2).

2) Further shares can be issued without passing a special resolution or obtaining the Central government's approval and without offering the same necessarily to existing share holders - Sec.81 (3).

3) Provisions as to the kinds of share capital (Sec. 85), the further issue of share of capital (Sec.86), voting rights (Sec.87), the issue of shares with disproportionate rights (Sec.88) and the termination of disproportionate excessive rights (Sec.89), do not apply to private companies - Sec. 90 (2).

4) Business can be commenced immediately on incorporation without obtaining a certificate of commencement from Registrar - Sec.149 (7).

5) It is not necessary to hold a statutory meeting and to send a statutory report to shareholders and file the same with the Registrar - Sec.165 (10).

6) Articles of a private company may provide for regulations relating to general meetings which need not conform to the provisions of Sec 171 to 186 - Sec.170 (1).

7) Any amount can be paid to the directors as remuneration and the same is not restricted to any particular proportion of the net profits - Sec.198 (1).

8) A private company need not have more than two directors - Sec.252 (2).

9) A proportion of directors need not retire every year - Sec.255 (1).

10) Statutory notice etc., is not required for a person to stand for election as a director - Sec.257 (2).

11) The Central Government's sanction is not required to effect an increase in the number of directors beyond 12 or the number fixed by the articles of association-Sec. 259.

12) The Central Government's sanction is not required to modify any provision relating to the appointment of managing, whole-time or non-rotational directors - Sec.268.

13) The Central Government's approval is not required for appointment of managing or whole-time director or manager - Sec. 269 (2).

14) Directors of a private company need not possess any share qualifications, in terms of section 270- Sec. 273.

15) Restrictive provisions regarding the total number of directorships which any person may hold do not include directorships held in private companies which are not subsidiaries of public companies - Sec. 275 to 279.

16) Certain restrictions on powers of board of directors do not apply - Sec. 293(1).

17) The prohibition against loans to directors does not apply - Sec. 295 (2).

18) The prohibition against participation in board meetings by interested directors does not apply - Sec. 300 (2).

19) The date of birth of director need not be entered in the register of directors - Sec. 303(1).

20) There is no restriction on the remuneration payable to directors - Sec. 309 (9).

21) There is no restriction on any change in remuneration of directors - Sec. 310.

22) Any increase in the remuneration not being sitting fees beyond the specified limit of directors on appointment or reappointment does not require the Central Government's approval - Sec. 311.

23) There's also no restriction on the appointment of a managing director - Sec. 316(1) and 317 (4).

24) There is no restriction on making loans to other companies - Sec. 370 (2).

25) There is no prohibition against the purchase of shares, etc. in other companies - Sec. 372 (14).

26) The Central Government cannot exercise its power to prevent change in the board of directors, which is likely to affect the company prejudicially - 409 (3).



 4 Replies

Shambasiv (n/a)     04 October 2007

Nice Info pal

Miharika (n/a)     16 November 2007

Useful info.  Any idea about practical procedures for voluntary Winding up of a small Pvt Ltd Co. having no liabilities and no business?

Nisha Naker (Company Secretary)     27 March 2008

A small pvt. ltd. co. can apply to RoC for striking off its name from the Register of Companies kept with it u/s 560 of the Comapnies Act, 1956 as a defucant Co. by filling E-Form-61 with RoC on the grounds that the co. is not carrying on any activity either from the last 3 consequative years as on the date of filling application or from the date of incorporation and doesnot have any assets and liabilities as on the date of filling Form-61.

SANJAY DIXIT (Advocate)     31 March 2008

Useful Informations. Thanks dear Shambasiv & Nisha.

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