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Home >> Resources >> Priviledges & Exemptions For a Pvt. Ltd. Company

Privileges and Exemptions Available To Private Limited Comp

Sections Nature
3(1)(iii) It can be formed with a minimum paid-up Share Capital of INR. 100,000 as against INR 500,000 for a Public Company.
12(1) It can be formed with only 2 persons as against 7 in case of a Public Limited Company.
70(3) A Statement in Lieu of Prospectus need not be delivered to the Registrar before allotment of Shares in the Company.
77(2) Financial assistance for purchase or subscribing for shares in itself of its holding company
77A It is not prohibited from giving financial assistance for purchasing its own Shares or shares of its Holding Company.
81(3)(a) The provisions of Sub-Sections (1), (1A) and (2) of Section 81 prescribing the manner of further issue of Share Capital are not applicable.
90(2) The definitions of Preference and Equity Share capital as given in Section 85 of the Act are not applicable.
90(2) It is free from the restriction contained in Section 86 that, a Company Limited by Shares shall have only 2 kinds of Shares (Equity and Preference).
90(2) The voting rights of the Members need not be in conformity with the provisions of Section 87.
90(2) The prohibition of issue of Shares with disproportionate rights as contained in Section 88 is not applicable.
90(2) The provision contained in Section 89, requiring termination of disproportionately excessive voting rights attached to Equity Shares in existing Companies, if they are in excess of those specified in Section 87 are not applicable.
111 Appeal against refusal to transfer shares restricted.
149(7) It need not comply with the Provisions of Section 149(1) or (2) regarding commencement of business and need not obtain a Certificate of Commencement of Business, from the Registrar.
165 It need not hold a Statutory Meeting.
166(2) Proviso (b) It may fix the time as well as the place for its Annual General Meeting(s) either by its Articles or by passing a resolution agreed to by all the Members.
170(1)(ii) It can make provisions in its Articles relating to meetings, which, may be different from those, contained in Section 171 to 186 of the Act.
171-186 General Meeting’s provisions are liberal.
192 (1) with Section 170(1)(ii) It need not file with the Registrar a copy of an Explanatory Statement along with a Special resolution, if its Articles provide that Section 173 shall not apply to it.
192(4)(e) It need not file the resolutions passed in General Meetings pursuant to clause (a), (d) and (e) of Section 293(1) since that Section does not apply to Private Companies.
192A The provisions relating to passing of resolutions by Postal Ballot does not apply.
198(1) No ceiling on Managerial Remuneration.
204(6) Restrictions on appointment of a Firm or Body Corporate to an office or place of profit in the Company are not applicable.
210 Inspection of Profit and Loss Account by public is not permitted.
220(1)(a) Second proviso A person who is not a member of a company is not entitled to inspect, or obtain copies of the Profit and Loss Account of a Private Company under Section 610. This equally applies to the Companies in which one or more Bodies Corporate incorporated outside India holds the entire paid-up Share capital.
224(1B) Fourth proviso The Company or Board can appoint or re-appoint any person who is in full-time employment elsewhere or Firm as its Auditors if such person or Firm is, at the date of such appointment or re-appointment, holding appointment as auditor of specified number of Companies or more than the specified number of Companies.
252(1) The provision regarding small Shareholder’s representative on the Board is not applicable.
252(2) Minimum 2 Directors are needed as against 3 in case of Public Company.
255-257 Retirement of Directors etc. not applicable.
259 Central Government’s sanction to appoint more than 12 directors – Not Applicable.
262 Casual Vacancy / Director – No restriction.
263(1) Two or more Directors may be appointed by a single resolution.
264(3) Consent to act, as Director need not be filed with ROC.
266(5) The provisions regarding consent to act as Director to be filed with the Registrar and Qualification Shares are not applicable.
268 No approval of Central Government required for effecting an amendment to the Memorandum, Articles or an agreement relating to appointment or reappointment of a Managing or Whole-time Director or Non-retirable Director.
269,388 No approval of Central Government required for appointing or re-appointing a Manager or Whole-time Director or Manager, It shall not comply with the provisions of Schedule XIII.
270 to 273 The restrictions on the time limit within which Share qualification of a director should be obtained and maximum amount thereof as contained in Sections 270 and 272 are not applicable.
274(1)(g) The prohibition against a person disqualified under Section 274(1) clause (g) does not apply to the Director of a Private Company.
274(3) The Company may in its Articles provide for grounds for disqualification of a Director, in addition to those laid down in Section 274(1).
275-279 Restriction on number of directorship
283(3) Additional Grounds for vacation of office by Director can be provided.
First Proviso to Section 284(1) A Director holding office for life on 1st April, 1952 cannot be removed under Section 284.
292A Requirement as regards to audit Committee – Not applicable.
293 Restriction on powers of the Board – Not Applicable.
295(2) No approval of Central Government for giving a loan, guarantee or security to Director.
300(2) Interested Director can participate in discussion and voting.
303(1) The date of birth of Directors need not be entered in the Register of Directors required to be maintained under Section 303 of the Act.
309(1) Restrictions and ceiling on remuneration to be paid to the Directors / Managing Director / Whole-time Director and Manager imposed by Section 309 are not applicable.
310, 388 Approval of Central Government not required in case of increase in remuneration of a Managing Director, Whole-time Director or Manager of the Company.
311, 388 Approval of Central Government not required in case of increase in remuneration of a Managing Director, Whole-time Director or Manager of the Company on re-appointment.
316(1)(4) Restriction on number of Companies as Managing Director / Manager - Not applicable.
317,388 Restriction on appointment of Managing Director for more than 5 years at a time. - Not applicable.
349 to 350 Determination of net profits for remuneration - Not Applicable
372A Inter corporate loans, investments, and guarantees - Not Applicable
386 & 388 Restriction as to Managers - Not Applicable
388A Appointment of Manager – Number of Companies Remuneration – Not applicable.
409(3) Central Government’s power to prevent change in Board – Not applicable.
416(1) Contract with undisclosed Principal Company – Not Applicable.
Rules The Provisions of Companies (Acceptance of Deposits) Rules, 1975 - not applicable to the deposits accepted by the Company from its Shareholders, Directors and Relatives of Directors. [Rule 2 (b) (ix) of the said Rules]
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