Issue #2 I December I 2013
Contents:
Page No.
Statutory Due Dates for December 2013
-1
Companies Act, 2013 – Major Changes
-2
Service Tax - VCES, 2013
-6
Wealth Tax
-9
One Person Company – OPC
- 12
Commerce Insight
Financial Awareness
Legal Compliances
Economic Advancements
Issue #2 December 2013
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Issue #2 December 2013
Companies Act, 2013 – Major Changes -Lavanya R S
Background
N
ew Companies Act, 2013 took the president’s assent on 29th August 2013. The Act shall come in to force from the date(s) as may be notified by the central government as notified official gazette. As of now 98 sections are notified by the central government on 12-092013(Annexure - I for your reference) Companies Act,2013 has 470 sections and VII Schedules as against 658 sections & XV schedules under old Companies Act,1956. The entire companies act has been divided in to XXIX(29) Chapters. Many new chapters have been introduced namely, Government Companies(Chapter 23), Registered Valuers(Chapter 17), Special Courts(Chapter 28) etc., Many new definitions are introduced in the company’s act, 2013 namely;
Accounting Standards Associate Company Auditing Standards Authorized Capital Books of Accounts Called up capital Charge Chartered Accountant Chief Executive Officer Chief Financial Officer Company Limited By Guarantee Deposits Expert Financial Institution Financial Statement Foreign Company Free Reserves Global Depository Receipts Independent Director Indian Depository Receipt Interested Director
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Issued Capital Postal Ballot Promoter Public Financial Institution Register of Companies Related Party Remuneration Serious Fraud Investigation Office Small Company Subscribed capital Sweat Equity Shares Turnover Company Limited by Shares Key Managerial Personnel Unlimited Company Company Liquidator Notification Voting Right Contributory Official Liquidator Whole Time Director Control One Person Company Cost Accountant Ordinary or Special Resolution
Important changes regarding Incorporation related matters Sl.No 1 2 3 4 5
Heading Types of Companies Maximum number of members in Private Company One person company Obtain certificate of commencement of business Registered office
Companies Act,2013 Public Company Private Company One Person Company
Companies Act,1956 Public Company Private Company
Maximum 200
Maximum 50
New concept introduced Applicable to all companies having share capital
No such concept Applicable only to public companies
Submit the proof of Registered office along with details to be furnished in e-form -18
No proof to be submitted only filing of e-form-18 is sufficient
Important changes regarding Board Meeting Sl.No
Heading
1
First Board Meeting
2
Length of Notice
3
Penalty
4
Time gap between two board meetings
Companies Act,2013 Every company shall hold Board Meeting Within 30days of its Incorporation Meeting shall be called by giving not less than 7days notice Officer who fails to comply with above provision mentioned in point 2 shall be liable to penalty upto Rs.25000 Not more than 120 days
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Companies Act,1956 No specific time limit No such time prescribed Officer who fails to comply with above provision mentioned in point 2 shall be liable to fine which may extend to Rs.1000 At least one meeting to be held in every quarter
Important changes regarding Share Capital Sl.No 1 2 3
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Heading Issue of shares at a discount Issue of shares on private placement, bonus shares and GDRs Notice of alteration of share capital Consolidation & Division of Shares
Companies Act,2013 Not allowed except sweat equity shares Specific provision introduced
Companies Act,1956 Allowed under section 79 subject to conditions No specific provisions exists
Notice of redemption of shares to be filed with ROC within 30days in the prescribed form Along with passing of resolution in general meeting Approval of Tribunal is also required
No notice shall be filed to ROC regarding redemption of share capital No such requirement Passing resolution in general meeting is sufficient
Important changes regarding Directors and their Powers Sl.No
Heading
Companies Act,2013
Companies Act,1956
1
Maximum number of Directors Maximum number of Directorship
15
12
20
15
2
3
4
5
Composition of Board
Resignation of Director
Vacancy of Office for not attending board meetings
Prescribed class of Companies are required to appoint at least 1 woman director. At least 1 director should be a resident of India. Listed Companies to have at least one third independent directors. Director to send copy of resignation letter and detailed reasons for resignation to Registrar within 30 days of resignation The office of a director shall become vacant in case he is absent from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board.
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Minimum of 2 Directors in-case of private and 3 in case of public companies. Maximum 12 Directors No specific provisions except that any change in directors to be filed with ROC within 30 days. The office of a director shall be vacant if a director is absent from attending 3 consecutive meeting or from all the meeting of BOD for a continuous period of 3 months whichever is longer without obtaining the leave of absence from the board.
Important changes regarding Annual General Meeting Sl.No
2
Heading Maximum time for holding first AGM Time and Day
3
Consent for short notice
1
4
Quorum
Companies Act,2013 9 months from closure of accounts Every annual general meeting shall be called during business hours, that is, between 9 A.M. and 6 P.M. on any day that is not a National Holiday Consent to be given by not less than 95% of the members entitled to vote. Pvt Company – 2 members Public Company – 5 members where total number of members does not exceed 1000. 15 where total number of members does not exceed 5000. 30 members where total number of members exceeds 5000
Few points on Auditor under new Companies Act, 2013 • A company shall appoint an individual or a firm as auditor in the annual general meeting who shall hold office till the conclusion of sixth annual general meeting. • However company shall place a matter relating to appointment for acceptance by members in every annual general meeting. • Provisions for compulsory rotation of Individual Auditors in every five years and of Audit Firm every 10 years in the listed companies and certain other companies, as may be prescribed.
Companies Act,1956 18 months from incorporation or 9 months from closure of accounts whichever is earlier. Every annual general Meeting shall be called for a time during business hours, on a day that is not a public holiday. From all the members entitled to vote at the meeting.
Private Companies-2 Members. Public Companies-5 members.
• Auditor cannot render any of the following services, directly or indirectly to the company or its holding company or subsidiary company: Accounting and book-keeping services Internal audit Design and implementation of any financial information system Actuarial services Investment advisory services Investment banking services Rendering of outsourced financial services Management services Other prescribed services.
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Service Tax Voluntary Compliance Encouragement Scheme, 2013
-Manohar B V
a) The person who has furnished return under Section 70 of the Finance Act, 1994 and disclosed true liability, but has not paid the service tax so disclosed whether in total or in part, in such scenario
T
he Service Tax Voluntary Compliance Encouragement Scheme (“VCES”) has been implemented with effect from May 10, 2013 with the enactment of the Finance Bill 2013. The summarized overview of the Scheme is as follows:
b) Declaration under VCES cannot be made for the period covered under the return.
1. What is VCES?
c) The person against whom,—
VCES is a new amnesty scheme introduced vide Chapter VI of the Finance Act, 2013, to encourage voluntary compliance by defaulter of Service Tax under Chapter V of the Finance Act, 1994. The Hon’ble Finance Minister in his budget speech mentioned that there are nearly 17,00,000 registered assessees under the service tax but only about 7,00,000 assessees file their service tax returns.
- An inquiry or investigation in respect of a service tax not levied or not paid or short-levied or short-paid has been initiated by way of — (i) Search of premises under Section 82 of the Finance Act, 1994; or (ii) Issuance of summons under Section 14 of the Central Excise Act, 1944, as made applicable to the Finance Act under Section 83 thereof; or (iii) Requiring production of accounts, documents or other evidence under the Finance Act or the rules made thereunder; or - An audit has been initiated, And such inquiry, investigation or audit is pending as on the 1st day of March, 2013.
2. What is the effective date for implementation of the VCES? The Scheme has come into force with the enactment of the Finance Bill, 2013 i.e. from May 10, 2013. 3. Who are eligible to apply under VCES? Tax payers/ assessees who have not filled return or stopped filling return or who have not made a truthful declaration in their return are eligible to apply under VCES. Further, any person may declare his tax dues, in respect of which no notice or an order of determination under section 72 or section 73 or section 73A of the Finance Act, 1994 has been issued or made before the 1st day of March, 2013.
5. Whether a service provider who is not registered can apply under the VCES? Yes. In terms of the Rule 3 of the Service Tax Voluntary Compliance Encouragement Rules, 2013 (“VCES Rules”), if any person who wishes to apply under the VCES is not already registered, then he is required to take a registration under Rule 4 of the Service Tax Rules, 1994 as per the normal procedure of the Service Tax law.
4. Who are not eligible to apply under VCES? The following assessees are not eligible to opt for VCES in terms of Section 106 of the Finance Act, 2013:
6. What do you mean by “Tax Dues”? Tax dues means the service tax due or payable under the Finance Act, 1994 or any other amount due or payable under Section 73A thereof, for the period
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beginning from the October 1, 2007 and ending on the December 31, 2012 including a cess leviable thereon under any other Act for the time being in force, but not paid as on March 1, 2013.
The assessees has to deposit at least 50% of the declared dues by December 31, 2013 and the remaining portion of tax dues has to be paid by June 30, 2014 without any interest. Where the declarant fails to pay said tax dues or part thereof on or before the said date, he shall pay the same on or before the December, 31, 2014 along with interest thereon, to be calculated from July 1, 2014.
7. How to avail benefit of the Scheme? An Assessee can avail benefit under the Scheme by making truthful declaration regarding tax dues to Designated Authority in Form No. VCES-1. Thereafter, an acknowledgement in Form No. VCES-2 shall be issued to him with 7 working days of his declaration.
13. Whether the amount lying in Cenvat Credit Account be utilised for payment of tax dues? No. As per Rule 6(2) of the VCES Rules, Cenvat Credit shall not be utilized for payment of tax dues under the Scheme. Thus whole service tax dues are to be paid in cash.
8. What do mean by “Designated Authority”? According to VCES “designated authority” means an officer not below the rank of Assistant Commissioner of Central Excise as notified by the Commissioner of Central Excise for the purposes of this Scheme.
14. Whether tax paid under VCES is refundable? Tax paid under VCES is not refundable.
9. What is period for which assesses can avail relief under VCES? The Assessees can avail benefit under VCES for all service tax including cess, not paid from October 1, 2007 to December 31, 2012.
15. When the declaration made under VCES will be deemed as conclusive? Declaration will attain finality/ become conclusive upon issuance of acknowledgment of discharge of total tax dues from designated authority in Form No. VCES - 3. The acknowledgement of discharge shall be issued within a period of seven working days from the date of furnishing of details of payment in full along with interest, if any, by the declarant.
10. What are the benefits under VCES? Assessee who is making truthful declaration would be granted immunity from interest, penalty and other proceeding. 11. Whether a declarant shall get immunity from payment of late fee/ penalty for having not taken registration earlier? In this respect, the VCES Circular has clarified that it has been provided in the VCES that, beside interest and penalty, immunity would also be available from any other proceeding under the Finance Act, 1994 and Rules made there under. Accordingly immunity from payment of late fee/ penalty for having not taken registration earlier will be granted under the Scheme.
16. Whether the tax dues after December 31, 2012 will be eligible for benefit under VCES? No. Service tax liability effective from January 1, 2013 to be paid as normal service tax liability. 17. What is the last date for availing the scheme? The assessee can file the declaration under this scheme only up to December 31, 2013. 18. What if the declarant fails to declared tax dues? Where the assessee fails to pay the dues, either fully or in part, then amount along with interest will
12. What are the conditions to be fulfilled to avail benefit under VCES?
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pay tax said be
recovered as arrear of land revenue, which can be recovered by attaching the movable and immovable properties of the declarant. Also the immunity in terms of the VCES would be withdrawn. 19. What are the consequences if the declaration made under VCES is substantially incorrect? As per VCES, if the declaration made under VCES is found substantially incorrect by the Commissioner of Central Excise, then show cause notice is to be served for recovery of tax dues not paid or short paid within a period of one year from the date of declaration.
Illustration: Return filed for the period 01.10.2007 to 31.03.2008 but not paid service tax for the period. Thereafter neither filed their returns nor paid the service tax liability? Are they eligible to opt for the scheme? If so, to what extent? They cannot opt for the scheme for the period 01.10.2007 to 31.03.2008. They can opt for the scheme for the period from 01.04.2008 to 31.12.2012.
Penalty & Interest on Service
20. Who can remove difficulties while implementing the Scheme? In terms of Section 113 of the Finance Act, 2013, the Central Government may remove the difficulties and provide clarity in case of ambiguities while implementing the scheme. Further the Central Government cannot make such order (i.e. to remove ambiguity) after expiry of two years from the date when VCES comes into force. 21. State the matters for which the Central Government is empowered to make rules regarding VCES? In terms of Section 114 of the Finance Act, 2013 for successful implementation of VCES, the Central government is empowered to make rules by notification in official Gazette. Such rules may provide for all or any of the following matters, namely:— (a) the form and the manner in which a declaration may be made under subsection (1) of Section 107; (b)The form and the manner of acknowledging the declaration under subsection (2) of Section 107 (c) The form and the manner of issuing the acknowledgement of discharge of tax dues under sub-section (7) of Section 107; (d) Any other matter which is to be, or may be, prescribed, or in respect of which provision is to be made, by rules. In this context, the Central Government vide Notification No. 10/2013 dated May 13, 2013 has notified Service Tax Voluntary Compliance Encouragement Rules, 2013.
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WEALTH TAX
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ealth Tax was introduced in India through Wealth Tax Act 1957. It is a direct Tax. Wealth tax is Tax on Wealth. Persons covered under Wealth Tax Act 1. Individual 2. HUF 3. Company Persons not covered under this Act 1. Company registered under section 25 of the companies Act 1956 2. Co-operative Society 3. Social club 4. Political party 5. Mutual Fund specified under section 10(23D) of income Tax Act 1961
Rate of Tax Wealth Tax is charged @ 1% of the amount by which the net wealth exceeds Rs. 30 Lakhs. Assets for the purpose of Wealth Tax Following assets are covered for the purpose of calculation of net value of assets belonging to Assessee 1. Building: Any building or land appurtenant thereto, whether used for Residential purpose or commercial purposes or For the purpose of maintaining a guest house [including a farm house situated within twenty-five kilometers from the local limits of any municipality) Excludes: a. Residential house allotted by a company to - An employee or - An officer or
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Shivana Gowda
-A director who is in whole time employment, having a gross annual salary of less than ten lakh rupees; b. Any house for residential or commercial purposes which forms part of stock-in-trade c. Any house which is occupied by the assessee for the purposes of any business or profession carried on by him; d. Any residential property which is let out for a minimum period of 300 days in the previous year; e. Any property in the nature of commercial establishments or complexes. 2. Motor Cars: Motor cars other than those used by the assessee in the business of running them on hire or as stock-in-trade. Motor Cars covers all motor vehicle other than heavy vehicles. Hence, buses, trucks, tempos are not considered as Motor Cars, However, Jeep, Sport Utility Vehicle (SUV), Multi Utility Vehicle (MUV), are classifiable as Motor Car. 3. Jewellery: Jewellery, bullion, furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals; Excludes: Provided that where any of the said assets is used by the assessee as stock-in-trade 4. Yachts, Boats and Air craft’s: Yachts, boats and aircrafts other than those used by the Assessee for commercial purposes
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5. Urban Land: Urban land situated in specified area â&#x20AC;&#x2DC;specified area' definition given u/s.2(1A) of Income tax Act is as follows Distance from local municipal Population limits Within 2 KMs >10000 but < 1 Lakh Within 6KMs >1 Lakh but < 10 Lakhs Within 8KMs >10 Lakhs Excludes: a. Urban land does not include land on which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated b. any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him c. Any land held by the assessee as stock-in-trade for a period of ten years from the date of its acquisition by him.
4. Ruler jeweler under section 5(iv): Jewellery of central government in the possession of Ruler not being his personal property. 5. Exemption under section 5(v): Any person of Indian origin or citizen of India who is ordinarily residing in foreign country and who returns to India with the intention to settle permanently in India then cash and any assets brought by him to India and the value of assets acquirted by him from such money is exepmt from tax for 7 years. Debts (Section 2(m)) Debts owned by Assessee are deductible if these debts are incurred on the assets included in the Wealth.
6. Cash in Hand: Cash in hand, in excess of Rs. 50,000/- for individuals and Hindu undivided families and in the case of other persons, any amount not recorded in the books of account.
Exemptions (under section 5) 1. Trust under section 5(i): Any property held under trust for any public purpose of a charitable or religious nature in India shall be exempt from Tax 2. Co-parceners under section 5(ii): Share of a Co-parcener in a HUF property, is exempt as tax on whole property is paid by karta 3. Ruler Building under section 5(iii): Any building declared as official residence of a ruler by central government shall be exempt from Tax
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One Person Company – OPC
-Bharath V Ram
ne Person Company (OPC) is the Concept introduced by the Government of India in Companies Law,2009.
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The Companies Law, 2012 has been passed by Lok Sabha on 18th December 2012. Rajya Sabha also passed this bill on 8th August 2013. Now, President's nod is only pending to become law. The bill, will be come into force on the date on which the Central Government may, by notification in the Official Gazette.
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As per the Companies Law 2012, One Person Company is a Company which has only one person as a member Features of One Person Company (OPC)
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The following are the important features of the One Person Company (OPC) • One Person Company is one of the type of Company on the basis of number of members • One Person Company has only one person as a member/shareholder. • One Person Company is a Private Company • Minimum paid up share capital of One Person Company is one lakh rupees (Rs. 1,00,000) • One Person Company may be either a Company limited by share / a Company limited by guarantee / an unlimited Company • The words "One Person Company" should be mentioned in brackets below the name of the One Person Company • One Person Company shall indicate the name of the nominee/other person in the memorandum, with his prior written consent
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•
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•
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The written consent above, shall be filed with the Registrar at the time of incorporation of the One Person Company along with its M&A (Memorandum and Articles) The nominee/ other person can withdraw his consent at any time The member/Shareholder of One Person Company may change the nominee/other person at any time, by giving notice to the other person and intimate the same to Company. Then the Company should intimate the same to the Registrar In case of the death of member/shareholder or his incapacity to contract, then nominee/other person become the member of the Company Member/Shareholder of the One Person Company acts as first director, until the Company appoints director(s) One Person Company can appoint maximum 15 directors, but minimum should be one director One Person Company need not to hold any AGM (Annual General Meeting) in each year Cash Flow Statement may not include in the financial statements of One Person Company One Director is sufficient to sign the Financial Statements/Director's Report Within 180 days from the closure of the Financial Year, One Person Company should file the copy of the Financial Statements with Registrar One Person Company should inform to the Registrar about every contract entered and also should record in the minutes of the
meeting with in 15days from the date of approval by the BOD (Board of Directors) Companies Law provisions relates to One Person Company (OPC) A-Z provisions from the Companies Law 2012 relates to the One Person Company (OPC)
one lakh rupees (Rs. 1,00,000/-) or such higher paid-up share capital as may be prescribed, and which by its articles,
Section 2 (62): Definition of "One Person Company":
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:
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“One Person Company” means a company which has only one person as a member Section 2 (40): Definition of "Financial Statement" “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 with respect (OPC), small company, may statement;
the financial statement, to One Person Company company and dormant not include the cash flow
Section 2 (68): Definition of "Private Company" “private company” means a company having a minimum paid-up share capital of
(i) restricts the right to transfer its shares; (ii) except in case of One Person Company (OPC), limits the number of its members to two hundred:
Provided further that-• persons who are in the employment of the company; and • persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and (iii) prohibits any invitation to the public to subscribe for any securities of the company; Section 3: Formation of the One Person Company (OPC) (1) A company may be formed for any lawful purpose by: (a) seven or more persons, where the company to be formed is to be a public company; (b) two or more persons, where the company to be formed is to be a private company; or (c) one person, where the company to be formed is to be One Person Company (OPC) that is to say, a private company, by subscribing their names or his name to a memorandum and complying with the
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requirements of this Act in respect of registration:
(b) a company limited by guarantee; or (c) an unlimited company.
Provided that the memorandum of One Person Company (OPC) shall indicate the name of the other person, with his prior written consent in the prescribed form, who shall, in the event of the subscriber’s death or his incapacity to contract become the member of the company and the written consent of such person shall also be filed with the Registrar at the time of incorporation of the One Person Company (OPC) along with its memorandum and articles:
Section
4(1)(f)
:
Memorandum
The memorandum of a One Person Company (OPC) shall state - the name of the person who, in the event of death of the subscriber, shall become the member of the company. Section 12 (3): Registered Office of the One Person Company (OPC) Provided further that the words ‘‘One Person Company’’ shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.
Provided further that such other person may withdraw his consent in such manner as may be prescribed:
Section
Provided also that the member of One Person Company (OPC) may at any time change the name of such other person by giving notice in such manner as may be prescribed:
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(1):
Annual
Return
Provided that in relation to One Person Company (OPC) and small company, the annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company.
Provided also that it shall be the duty of the member of One Person Company (OPC) to intimate the company the change, if any, in the name of the other person nominated by him by indicating in the memorandum or otherwise within such time and in such manner as may be prescribed, and the company shall intimate the Registrar any such change within such time and in such manner as may be prescribed:
Section 96 (1) : Annual General Meeting (AGM) Every company other than a One Person Company (OPC) shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next AGM.
Provided also that any such change in the name of the person shall not be deemed to be an alteration of the memorandum. (2) A company formed under sub-section (1) (ie., One Person Company / Private Limited Company / Public Limited Company) may be either: (a) a company limited by shares; or
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Section 122 : Applicability of Chapter-VII (Management & Administration) to One Person Company (OPC) (1) The provisions of the below sections shall not apply to a One Person Company (OPC) • Section 98 : Power of Tribunal to call meetings of members, etc. • Section 100 : Calling of extraordinary general meeting • Section 101 : Notice of meeting • Section 102 : Statement to be annexed to notice • Section 103 : Quorum for meetings • Section 104 : Chairman of meetings • Section 105 : Proxies • Section 106 : Restriction on voting rights • Section 107 : Voting by show of hands • Section 108 : Voting through electronic means • Section 109 : Demand for poll • Section 110 : Postal ballot • Section 111 : Circulation of members' resolution (2) The ordinary businesses as mentioned under clause (a) of sub-section (2) of section 102 which a company, other than a One Person Company, is required to transact at its annual general meeting, shall be transacted, in case of One Person Company, as provided in sub-section (3). (3) For the purposes of section 114 (Ordinary and Special Resolutions), any business which is required to be transacted at an annual general meeting or other general meeting of a company by means of an ordinary or special resolution, it shall be sufficient if, in case of One Person Company, the resolution is communicated by the member to the company and entered in the minutes-book required to be maintained under section 118 (Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed
by postal ballot) and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes under this Act. (4) Notwithstanding anything in this Act, where there is only one director on the Board of Director of a One Person Company, any business which is required to be transacted at the meeting of the Board of Directors of a company, it shall be sufficient if, in case of such One Person Company, the resolution by such director is entered in the minutes-book required to be maintained under section 118 (Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot) and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors for all the purposes under this Act. Section Board’s
134
:
Financial report,
statement, etc.
Section 134 (1) : The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board at least by the chairperson of the company where he is authorised by the Board or by two directors out of which one shall be managing director and the Chief Executive Officer, if he is a director in the company, the Chief Financial Officer and the company secretary of the company, wherever they are appointed, or in the case of a One Person Company, only by one director, for submission to the auditor for his report thereon. Section 134 (4) : The report of the Board of Directors to be attached to the financial statement under this section shall, in case of a One Person Company, a report containing explanations or
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comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report. Section 137 (1) : Copy of financial statement to be filed with Registrar 3rd Proviso : Provided also that a One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year Section 149 : Company to have Board of Directors (1) Every company shall have a Board of Directors consisting of individuals as directors and shall have : (a) a minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and (b) a maximum of fifteen directors: Provided that a company may appoint more than fifteen directors after passing a special resolution: Provided further that such class or classes of companies as may be prescribed, shall have at least one woman director. Section 152 : Appointment of Directors (1) Where no provision is made in the articles of a company for the appointment of the first director, the subscribers to the memorandum who are individuals shall be deemed to be the first directors of the company until the directors are duly appointed and in case of a One Person Company an individual being member shall be deemed to be its first director
until the director or directors are duly appointed by the member in accordance with the provisions of this section. Section
173
:
Meetings
of
Board
(5) A One Person Company, small company and dormant company shall be deemed to have complied with the provisions of this section if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days: Provided that nothing contained in this sub-section and in section 174 (Quorum for meetings of Board) shall apply to One Person Company in which there is only one director on its Board of Directors. Section 193 : Contract by One Person Company (OPC) (1) Where One Person Company limited by shares or by guarantee enters into a contract with the sole member of the company who is also the director of the company, the company shall, unless the contract is in writing, ensure that the terms of the contract or offer are contained in a memorandum or are recorded in the minutes of the first meeting of the Board of Directors of the company held next after entering into contract: Provided that nothing in this sub-section shall apply to contracts entered into by the company in the ordinary course of its business. (2) The company shall inform the Registrar about every contract entered into by the company and recorded in the minutes of the meeting of its Board of Directors under sub-section (1) within a period of fifteen days of the date of approval by the Board of Directors.
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