Exemption to Government Companies under Companies Act 2013

Exemption-to-Government-Companies-under-Companies-Act-2013

Exemption to Government Companies under Companies Act 2013

In exercise of the powers conferred by clauses (a) and (h) of sub-section (1) of section 462 and in pursuance of sub-section (2) of said section of the Companies Act, 2013 (18 of 2013) and in supersession of notifications issued under section 620 of the Companies Act, 1956 (1 of 1956), except as respects things done or omitted to be done before such supersession, the Central Government, in the interest of public, exempted the Government Companies from the following provisions of Companies Act, 2013 fully or partially : 
Section
Description
Section 4 -Memorandum
The name of a Government company whether public limited or private limited shall end with the word “Limited” even if it is private limited [Section 4(1) (a)]
Section 56- Transfer and transmission of securities
  • The requirement related to submission of proper instrument of transfer duly stamped, dated , executed for registering the transfer of shares by the company shall not apply with respect to the bonds issued by a Government company, provided that an intimation by the transferee specifying his name, address and the occupation, if any, has been delivered to the company along with the certificate relating to the bond; and if no such certificate is in existence, along with the letter of allotment of the bond: [Section 56(1) second proviso)
  • The requirement related to submission of proper instrument of transfer duly stamped, dated , executed for registering the transfer of shares by the company shall not apply in respect of shares held by the nominee of the Central Government [Section 56(1) third proviso)
Section 89- Declaration in respect of Beneficial interest in any share
Shall not apply.
Section 90- Investigation of beneficial ownership of shares in certain cases.
Shall not apply
Section 96 (2) -Annual general meeting.
The annnual general meeting shall, held either at the registered office or such other place as the Central Government may approve in this behalf. [Section 96 (2)]
Section 123 - Declaration of dividend.
The provisions related to declaration of dividend out of accumulated profits earned by the company in the previous years and transferred to reserves , due to indequacy or absence of profits in any financial year shall not apply to a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments. [Section 123(1) second proviso]
Section 123 - Declaration of dividend.
The provisions related to deposit of the amount of dividend including interim dividend in a scheduled bank within 5 days of declaration of such dividend shall not apply to a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments or by one or more Government company. [ Section 123(4)]
Section 129.- Financial Statement
Shall not apply to the extent of application of Accounting Standard 17 (Segment Reporting) to the companies engaged in defence production.
Section 134 - Financial statement, Board’s report, etc.
The requirement related ti disclosure of company’s policy on directors’ appointment and remuneration including criteria for determining qualifications , positive attributes, independent of a director and other matters provided under sub-section (3) of section 178 shall not apply [Section 134(3) (e)]
Section 134 - Financial statement, Board’s report, etc.
The provisions related to disclosure of the manner in which performance of Board, its committee and Directors is evaluated shall not apply in case the directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the company, or, as the case may be, the State Government, as per its own evaluation methodology.[Section 134(3) (p)]
Section 149- Company to have Board of Directors
The provisions related to maximum number of directors on the Board along with requirement of special resolution to increase the limit of maximum number of directors shall not apply.
[Section 149(1 )(b) and first proviso to sec 149 (1])
Section 149-Company to have Board of Directors
The independent director should in the opinion of Ministry or Department of the Central Government which is administratively in charge of the company, or, as the case may be, the State Government, be a person of integrity and possess relevant expertise and experience. [Section 149 (6)(a)]
Section 149 - Company to have Board of Directors
The provision that no person shall be appointed as independent director who has or had no pecuniary relationship with the company, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year shall not apply.[Section 149 (6)(c)]
Section 152-Appointment of director
The provisions related to obtaining consent to act as director, filing of said consent with Registrar and providing a statement in the explanatory statement with respect to the appointment of independent directors shall not apply where appointment of such director is done by the Central Government or State Government, as the case may be. [Section 152(5)]
Section 152-Appointment of director
The provisions related to retirement of directors and adjournment of the meeting where the vacancy of retiring director is not so filled-up and the meeting has not expressly resolved not to fill the vacancy shall not apply to –­
  • a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;
  • a subsidiary of a Government company, referred to in (a) above, in which the entire paid up share capital is held by that Government company [Section 152 (6) & (7)]
Section 160- Right of persons other than retiring directors to stand for directorship
Shall not apply to –­
  • a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;
  • a subsidiary of a Government company, referred to in (a) above, in which the entire paid up share capital is held by that Government company.
Section 162 - Appointment of directors to be voted individually
Shall not apply to —
  • a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;
  • a subsidiary of a Government company, referred to in (a) above, in which the entire paid up share capital is held by that Government company.
Section 163 - Option to adopt principle of proportional representation for appointment of directors
Shall not apply to —
  • a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;
  • a subsidiary of a Government company, referred to in (a) above, in which the entire paid up share capital is held by that Government company.
Section 164 - Disqualifications for appointment of director.
The disqualification of directors arising due to failure of the company to file financial statements or annual returns for any continuous period of three financial years or to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more, shall not apply[Section 164 (2)]
Section 170 - Register of directors and key managerial personnel and their shareholding
Shall not apply to a Government Company in which the entire share capital is held by the Central Government, or by any State Government or Governments or by the Central Government or by one or more State Governments.
Section 171- Members’ right to inspect
Shall not apply to a Government Company in which the entire share capital is held by the Central Government, or by any State Government or Governments or by the Central
Section 177 - Audit Committee
The audit committee shall only recommend the remuneration of the auditors and not the appointment and terms of appointment [Section 177 (4)(i)]
Section 178 - Nomination and Remuneration Committee and Stakeholders Relationship Committee.
The provisions related to identification of persons who are qualified to become directors , evaluation of every directors performance , formulation of criteria for determing qualficiation, postive attributes and independence of a director , recommendation of policy related to remuneraton of directors, key managerial personnel and other employee, and matters to be considered while preparing the aforesaid policy shall not apply to Government company except with regard to appointment of‘senior management' and other employees [Section 178(2), (3), (4)]
Section 185 - Loan to Directors
Shall not apply to Government company in case such company obtains approval of the Ministry or Department of the Central Government which is administratively in charge of the company, or, as the case may be, the State Government before making any loan or giving any guarantee or providing any security under the section.
Section 186 - Loan and investment by company
Shall not apply to –
  • a Government company engaged in defence production;
  • a Government company, other than a listed company, in case such company obtains approval of the Ministry or Department of the Central Government which is administratively in charge of the company, or, as the case may be, the State Government before making any loan or giving any guarantee or providing any security or making any investment under the section.
Section 188 -Related Party Transaction
The provisions related to obtaining the approval of shareholders by way of special resolution in case the transactions with the related party exceed the prescribed limits and restriction related to voting by related party in the shareholders meeting. shall not apply to —
  • a Government company in respect of contracts or arrangements entered into by it with any other Government company;
  • a Government company, other than a listed company, in respect of contracts or arrangements other than those referred to in clause (a), in case such company obtains approval of the Ministry or Department of the Central Government which is administratively in charge of the company, or, as the case may be, the State Government before entering into such contract or arrangement. [Sec188(1) first and second proviso]
Section 196 - Appointment of managing director whole-time director or manager
The following provisions related to -
appointment of managing director, manager and whole time director for a period exceeding five year and restriction on re-appointment before the expiry of the one year before the expiry of term;
  • appointment of managing director, manager and whole time director in accordance with schedule V by the Board of directors subject to the approval of general meeting
  • validity of the act of managing director, manager and whole time director, where the appointment is not approved by the general meeting
shall not apply. [Section 196 (2), (4) & (5)]
Section 197 - Overall maximum managerial Remuneration and managerial Remuneration in case of absence or inadequacy of profits
Shall not apply.
Section 203- Appointment of key managerial personnel
The following provisions related to
  • mandatory appointment of KMP;appointment of KMP by way of resolution passed by the Board of Directors;
  • whole time KMP shall not hold office is more than one company except in its subsidiary company
  • filing of vacancy in the office of whole time KMP within six months from the date of vacancy
shall not apply to a managing director or Chief Executive Officer or manager and in their absence, a whole­time director of the Government Company.
[Section 203 (4A)
Section 439 - Offences to be non cognizable
The court shall only take cognizance of any offence under this Act which is alleged to have been committed by the government company or any officer thereof, except on the complaint in writing of a person authorised by the Central Government in that behalf : [Section 439 (2)]
Previous
Next Post »