Company Registration Compliances

Threshold Limit Under the Companies Act 2013

The Applicability of the section and its provision is based on the inception whether it relates to the Appointment of the directors, Key Managerial Personnel, Auditor’s Appointment, Committee establishment, XBRL filing, Related Party Transactions, Vigil Mechanism, Corporate Social Responsibility, etc. A full analysis of Threshold Limit Under the Companies Act 2013.

Threshold Limit and Provisions under the Companies Act,2013

The threshold limit and the applicability of the provisions under the Companies Act 2013 are as follows-

Appointment of Directors and KMP

Appointment of Directors (i.e. Women Director and Independent Director)-Section 149 of the Companies Act, 2013–

Appointment of Women Director-

The criteria for appointing a Women Director, i.e. the below-mentioned companies shall appoint at least one-woman director-

• Every listed public company;
• Every other public company having –
• A company having a paid-up share capital of one hundred crore rupees or more; or
• A company having a turnover of three hundred crore rupees or more:

Note-1 Women Independent Director shall be appointed in the Board of Directors by Top 500 entities by April 1, 2019, and Top 1000 listed entities by April 1, 2020.

Appointment of Independent Director-

The criteria for appointing an Independent Director, i.e. the below-mentioned companies shall appoint an Independent Director-

• Every Listed Public Company
• Every other Public Companies having paid-up share capital of ten crore rupees or more;
• Every Public Company having a turnover of one hundred crore rupees or more; or
• Every Public Company which have, in the aggregate, outstanding loans, debentures, and deposits, exceeding fifty crore rupees.

Appointment of Resident Director-

Every Company shall appoint a Resident Director in the Company. (Section 149 of the Companies Act 2013)

Appointment of Key Managerial Personnel-

• All listed Public companies and
• The public company which are unlisted, having a paid-up share capital of Rs. 10 crores or above.

Appointment of Company Secretary-

• Every listed Public Company,
• All companies having a paid-up share capital of Rs 5 crore or above,
• Public Company having a paid-up share capital of Rs 10 crore or above.

Constitution of Committees

Different Committees are required to be constituted by the companies falling under the below threshold limits-

For ameliorating the Board’s effectiveness and efficiency, Committees or ‘Board Committees’ are formed in areas where more speciate and technical decisions are required to be taken

I-Audit Committee-

• Every listed public company.
• Every Public Company having paid-up share capital of 10 crores rupees or above; or
• Every Public Company having a turnover of 100 crores rupees or above; or
• Every Public Company which have, in totality, outstanding loans, debentures, and deposits, exceeding fifty crore rupees.

II-Nomination and Remuneration Committee-

• Every listed public company.
• Every Public Company having paid-up share capital of ten crore rupees or above; or
• Every Public Company having a turnover of one hundred crore rupees or above; or
• Every Public Company which have, in totality, outstanding loans, debentures and deposits, exceeding fifty crore rupees.

III-Stakeholder Relationship Committee-

A company having more than 1000 members, debenture holders, deposit holder or security holders at any time in a financial year, are required to constitute a Stake-holder Committee.

IV-Corporate Social Responsibility Committee-Every Company are required to constitute the CSR Committee-

• Having a net worth of Rs. 500 crore or above, or
• Turnover of Rs. 1000 crores or above or
• A net profit of Rs. 5 crores or above during any financial year.

V-Internal Complaint Committee-Companies covered under POSH Act,2013, i.e.Prevention, Prohibition and Redressal) Act, 2013. It requires an employer to set up an Internal Complaint Committee at each office or branch, of a company employing 10 or more employees, to entertain and redress grievances related to sexual harassment.

VI-Risk Management Committee-As per the LODR regulation-Regulation 21, Every Listed Company except SME is required to constitute the Risk Management Committee.

Appointment of Auditor and its rotation

I. Appointment of Internal Auditor-Every Company falling under the below-mentioned threshold limit is required to appoint the Internal Auditor-

A-Every Listed company;

B-Every unlisted Public Company having a paid-up share capital of Rs 50 crore or above or having a turnover of Rs 200 crore rupees or above during the previous financial year. Or,

• Outstanding loans or borrowings of the Unlisted Public Company from banks or public financial institutions exceeding 100 crore rupees or above at any point of time during the previous financial year. Or,
• Outstanding deposits of the Unlisted Public Company of 25 crore rupees or above at any point of time during the previous financial year; and

C-Every private company having a turnover of 200 crore rupees or above during the previous financial year; Or

• Outstanding loans or borrowings of Unlisted Public Company from banks or public financial institutions exceeding 100 crore rupees or more at any point in time during the preceding financial year.

II. Appointment of Statutory Auditor-Every Company falling in the below-mentioned category shall appoint Statutory Auditor-

• Listed Public Company
• Every Unlisted public company having a paid-up share capital of 50 crore rupees or more; or
• Every Unlisted public company having a turnover of 250 crore rupees or more.

Policy Making

I-Vigil Mechanism Policy-Below mentioned Category are required to constitute a vigil mechanism Policy-

• Listed Company
• Companies which undertake deposits from the public;
• Companies which has borrowed money from banks and public financial institutions in excess of fifty crore rupees.

II-Risk Management Policy-Risk Management Policy is a policy to create and protect the stakeholder’s value by minimizing the losses and to maximize the opportunities. The report of the Board of directors must include a statement that shall indicate the development and implementation of the risk management Policy.

III-XBRL-

• All Listed Public Company and its Subsidiaries
• All Public or Private companies having a paid-up capital of Rs. 5 Crore and above.
• All Public or Private companies having a turnover of Rs 100 Crore above.

Exemption-Below Mentioned companies are exempted from XBRL filing-

• Banking Companies
• Insurance Companies
• Power Companies
• Non-Banking Financial Companies
• Housing and Finance Companies