BIG Company = Cash Flow
|Small Co Sec 2 (85) as per Co act 2013||‘‘small company’’ means a company, other than a public company,—
(i) paid-up share capital of which does not exceed fifty lakh rupees or such
higher amount as may be prescribed which shall not be more than five crore
(ii) turnover of which as per its last profit and loss account does not
exceed two crore rupees or such higher amount as may be prescribed which shall
not be more than twenty crore rupees:
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act;
|Private Co||Public CO|
|Paid Up Capital Up To or Less Than 50 Lacs||Paid Up Capital More than 50 Lacs|
|Turnover upto 2 Cr and Less Than 2 Cr||Turnover More Than 2 Cr|
|Both Paid and Turnover Condition Must be Satisfied||Any Condition Paid and Turnover be Satisfied|
|“financial statement” in relation to a company, includes— (i) a balance sheet as at the end of the financial year; (ii) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year; (iii) cash flow statement for the financial year; (iv) a statement of changes in equity, if applicable; and (v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv) Provided that the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement; It means all the companies whether private or public needs to include cash flow statement in its financial statement except the One Person Company, small company and dormant company. Now we have to check the definition of One Person Company, small company and dormant company|
|Not applicable to||Applicable to|
|Format||Since the Companies Act, 2013 does not lay down any format for preparation of cash flow statement, companies will need to follow AS 3 in this regard. In respect of listed companies, the listing agreement requires the indirect method for preparing cash flow statements. Thus, under the Companies Act, 2013, non-listed companies will have a choice of either applying the direct or indirect method under AS 3 to prepare the cash flow statement. Due to the listing agreement requirement, that choice will not be available to listed companies|
Private company can accept unsecured loans apart from director even from a relative of a director of the company without any limit…
Without any upper limit of amount, private company can accept unsecured loans apart from director even from a relative (as per definition) of a director of the company with simple declaration saying the relative has not borrowed same from others.
Companies (Indian Accounting Standards) Rules, 2015
The Ministry of Corporate Affairs has issued a Notification dated 16th February, 2015 and has notified the road map for the applicability of the Indian Accounting Standards (Ind AS) for compliance by the class of companies specified in the said roadmap.
|No of Accounting Standard||39|
|Rule||The Companies (Indian Accounting Standards) Rules, 2015|
Thirty Nine (39) Indian Accounting Standards shall continue to comply with Accounting Standards as prescribed in the Companies (Accounting standards) Rules, 2006.
Removal of Difficulties Dated 13-02-2015
Removal of Difficulties w.r.t Section 2 (85) “Small Company”:
Now a Company needs to satisfy both the conditions i.e. paid up capital upto Rs. 50 lakhs AND Turnover upto Rs. 2 crores, to be classified as Small Company.
ordinary course of its business.
Companies Act, 2013 (Act) was notified on 29th August, 2013.
|The government has moved amendments to the Companies Act in the Lok Sabha. The bill seeks to amend seven key provisions. Finance Minister Arun Jaitley said, “After a detailed consideration, some minor amendments are required in the principal act. Now, most of them are indented for one purpose – the ease of doing business and in some cases, they were oversight which were left out. Now it is only to rectify those and in rectification of those mistakes provision in the Bill itself. The advice of the law ministry was that these changes could not be covered and therefore, these small consequential amendments have arisen because of that.” As a part of the amendments, related party transactions (RPT) are set to get simpler, as companies will only need an ordinary resolution and not a special resolution. In addition, auditors will have to report on fraud to the government, which are only above a particular threshold. Any fraud below the threshold can be reported only to the audit committee of the company. The threshold will depend on profit or turnover of the company. Meanwhile, the government is also looking to strengthen the National Companies Law Tribunal to speed up winding up of companies. These will be the key changes to the Companies Act|