PIB ANALYSIS 17-09-22

Part 2

MCA revises threshold for paid up capital of “small companies”

  • The Ministry of Corporate Affairs (MCA) has changed the definitions for small companies.
  • Earlier, definition of “small companies” under the Companies Act, 2013 was revised by increasing their thresholds for paid up capital from “not exceeding Rs 50 lakh” to “not exceeding Rs 2 crore” and turnover from “not exceeding Rs 2 crore” to “not exceeding Rs 20 crore”.
  • This definition has, now, been further revised by increasing such thresholds for paid up Capital from “not exceeding Rs. 2 crore” to “not exceeding Rs. 4 crore” and turnover from “not exceeding Rs. 20 crore” to “not exceeding Rs. 40 crore”.

Some of the benefits of reduction in compliance burden as a result of the revised definition for small companies are as under:

  1. No need to prepare cash flow statement as part of financial statement.
  2. Advantage of preparing and filing an Abridged Annual Return.
  3. Mandatory rotation of auditor not required.
  4. An Auditor of a small company is not required to report on the adequacy of the internal financial controls and its operating effectiveness in the auditor’s report.
  5. Holding of only two board meetings in a year.
  6. Annual Return of the company can be signed by the company secretary, or where there is no company secretary, by a director of the company.
  7. Lesser penalties for small companies.

 

‘Swachhta Hi Sewa’ (SHS) Fortnightly Campaign

  • The Department of Drinking Water and Sanitation, Ministry of Jal Shakti, has started a fortnightly campaign, ‘Swachhta Hi Sewa’ (SHS) to accelerate the efforts towards complete sanitation in rural India. It is a massive community mobilization drive for cleaning up of legacy waste and activities for solid waste management.

As part of this annual campaign, States are requested to organise activities with the objectives of

  1. ensuring community mobilization and participation, a “jan andolan” towards Open Defecation Free (ODF)Plus villages
  2. disseminating importance of a “sampoorn swachh” village
  3. reinforcing the concept of “Sanitation as everyone’s business” and
  4. commemorating Swachh Bharat Diwas (2nd October) at the village level.
  • The Campaign has started from 15th September and will culminate on 2nd October.