How Private Limited Companies gets affected by Companies Bill, 2012?
Companies Bill, 2012 has been passed by Rajya Sabha which will replace Companies Act, 1956 and be called as Companies Act, 2013, once assent of the President is confirmed.
Here we share what does companies bill, 2012 brings for Private Limited Companies:
1. Earlier the maximum number of members in a private limited was restricted to 50 but now with new companies bill, this number has been increased from 50 to 200.
2. Total Number of directors in a private limited company has been increased from 12 to 15.
Under new bill prescribed companies will be required to appoint at lease one women director and also, at lease one director must reside in India for not less than 182 days in the previous year.
3. Every private limited company having net worth of Rs.500 crore or more, or turnover of Rs.1000 crore or more or net profit of Rs.5 crore of more in any previous year must spend at least 2% of its average net profits made during immediately preceding year for Corporate Social Responsibility (CSR).
The activities included in CSR are eradication of hunger and poverty, promotion of education, empowering women and improving maternal health, child mortality, combating HIV, ensuring environmental sustainability, vocational skill enhancement etc, and such other activities as may be prescribed.
4. There was no clause or section in old companies act prescribing the amount which could be paid to director as remuneration but new companies bill capped director’s remuneration at 5 % of the net profits of the company.
5. Irrespective of accumulated losses of past year a company is permitted to declared dividends out of their current year profits.
6. Except one person company, small company and dormant company, every company is required to include a cash flow statement with the Annual Financial Statements.
7. Auditors of the company shall necessary be rotated every fiver years.