Threshold limit under companies act

Question 1

“Sec. 178 +

Rule 6” Mandatory constitution of Nomination and Remuneration Committee (NRC)

Answer 1

“Applicability:
(i) Listed Companies
(ii) Public companies having paid up capital > Rs. 10 Crore
(iii) Public companies having turnover > Rs. 100 Crore”
(iv) Public companies having aggregate of outstanding loans, borrowings, debentures and deposits >Rs. 50 Crore
Non-applicability
The following classes of unlisted public companies shall not be required to constitute Nomination and Remuneration Committee.
(a) A joint venture
(b) A wholly owned subsidiary
(c) A dormant company as defined under section 455 of the Act.
Composition of Nomination and Remuneration Committee
(i) No. of non-executive directors > 3
(ii) Independent Directors minimum one half
(iii)Chairperson of the company cannot be Chairperson of NRC

Question 2

Sec. 135

Corporate Social Responsibility

Answer 2

“Any company (including a foreign company) having-
(i) Net Profit > Rs. 5 crore; or
(ii) Net Worth > Rs. 500 crore; or
(iii) Turnover >Rs. 1,000 crore
If the company ceases to fulfill above criteria for 3 consecutive FYs, then, section 135 shall not apply.”

Question 3

“Sec. 136
and Rule 11”
Circulation of financial statements by electronic mode

Answer 3

“(i) Listed company; or
(ii) Public company having net worth > Rs. 1 crore and turnover > Rs. 10 crore. In case of above companies, the financial statements shall be circulated-
(i) by electronic mode, in the following 2 cases:
(A) Where a member holds shares in dematerialized form and his email Id is registered with the Depository for communication purposes.
(B) Where a member does not hold shares in dematerialized form, but he has positively consented in writing for receiving such documents by electronic mode.
(ii) by dispatch of physical copies through any recognized mode of delivery as specified u/s 20, in all other cases.”

Question 4

“Sec. 137
and Rule 3”
Filing of financial statement and other documents in XBRL form with the Registrar

Answer 4

“(i) All listed companies and their Indian subsidiaries
(ii) All companies having paid up capital of Rs. 5 crore or above
(iii) All companies having (turnover of Rs. 100 crore or above)
(iv) All companies which were hitherto covered under the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2011.”
However, the companies in banking, insurance,
power sector, non-banking financial companies and
housing finance companies need not file financial
statements in XBRL.

Question 5

Sec. 138

Mandatory internal audit

Answer 5

(i) Listed companies
(ii) Unlisted public companies:
“(a) Deposits > Rs. 25 Crore
(b) Paid up capital > Rs. 50 Crore
(c) Borrowings or loans from Banks and PFI > Rs. 100 crore or more
(d) Turnover > Rs. 200 Crore
(iii) Private companies:”
“(a) Borrowings or loans from Banks and PFI > Rs. 100 crore or more
(b) Turnover > Rs. 200 Crore”

Question 6

Sec. 139(2) + Rule 5

Rotation of auditors

Answer 6

Applicability:
(i) Listed Companies
(ii) Unlisted Public companies having paid up share capital > Rs. 10 Crore
(iii) Private Companies having paid up capital > Rs. 50 Crore
(iv) All Companies having public borrowings from financial institutions, banks or public deposits > Rs. 50 Crore
Non-applicability:
(i) One Person Companies
(ii) Small Companies

Question 7

Second “Proviso to Sec. 149(1)
+ Rule 3”
Mandatory appointment of Woman Director

Answer 7

(i) Listed companies
(ii) Public companies having paid up share capital > Rs. 100 Crore
(iii) Public companies having turnover > Rs. 300 Crore

Question 8

Sec. 149(3)

One Resident Director Mandatory

Answer 8

All Companies

Question 9

Sec. 149(4)

Independent Directors

Answer 9

“Listed Companies

Requirement Independent Directors > 1/3rd of TNOD”

Question 10

“Sec. 149(4)
+ Rule 4”
Independent Directors

Answer 10

“Applicability:
(i) Public companies having paid up capital > Rs. 10 Crore”
(ii) Public companies having turnover > Rs. 100 Crore
(iii) Public companies having aggregate of outstanding loans, debentures and deposits > Rs. 50 Crore.
Non-applicability:
The following classes of unlisted public companies shall not be required to have any independent director.
(a) A joint venture
(b) A wholly owned subsidiary
(c) A dormant company as defined under section 455 of the Act.
Legal Requirement: Independent Directors > 2

Question 11

“Sec. 151 + Rule 7”
“Small Shareholders”
Director

Answer 11

Listed Companies

Question 12

“Sec. 177 + Rule 6”

Mandatory constitution of Audit Committee

Answer 12

“Applicability:
(i) Listed Companies
(ii) Public companies having paid up capital >Rs. 10 Crore”
(iii) Public companies having turnover > Rs. 100 crores
(iv) Public companies having aggregate of outstanding loans, borrowings, debentures and deposits > Rs. 50 crores
Non-applicability:
The following classes of unlisted public companies shall not be required to constitute audit committee.
(a) A joint venture
(b) A wholly owned subsidiary
(c) A dormant company as defined under section 455 of the Act.
Composition of Audit Committee:
(i) No. of directors > 3
(ii) Majority: Independent directors
(iii) Majority: Ability to read and understand F. St.

Question 13

“Sec. 177 +
Rule 7”
Vigil mechanism

Answer 13

“(i) Listed Companies

(ii) Any company which accepts deposits from the public
(iii) Any company which has borrowed money from banks and public financial institutions > Rs. 50 Crore”

Question 14

Sec. 178
Mandatory
constitution of
Stakeholders
Relationship
Committee

Answer 14

Any company having > 1,000 shareholders,

debenture-holders, deposit-holders and any other security holders

Question 15

Sec. 185

Loans to directors etc.

Answer 15

“All companies except a private company-

(a) in whose share capital no other body corporate has invested any money:
(b) if the borrowings of such a company from banks or financial institutions or ay body corporate is less than twice of its paid-up share capital or Rs. 50 Crore, whichever is lower; and
(c) such a company has no default in repayment of such borrowings subsisting at the time of making transactions under this section.”

Question 16

“Rec. 203(1)
+ Rule 8”
Mandatory appointment of KMP

Answer 16

“(i) Listed Companies

(ii) Public companies having paid up share capital > Rs. 10 Crore.”

Question 17

“Sec. 203(1)
+ Rule 8A”
Mandatory appointment of whole-time CS

Answer 17

Any company other than a company covered under Rule 8, which has a paid-up share capital > Rs. 5 Crore.

Question 18

“Sec. 203(1)
– 2nd Proviso”
Chairman may be appointed as MD/CEO

Answer 18

Public companies having paid up share capital > Rs. 100 crore and turnover > Rs. 1000 crore which are engaged in multiple business and have appointed CEO for each such business.

Question 19

“Sec. 204 +
Rule 9”
Mandatory secretarial Audit

Answer 19

“(i) Listed Companies

(ii) Public companies having paid up capital > Rs. 50 Crore
(iii) Public Companies having turnover > Rs. 250 Crore.”