Compliances Based on Threshold Limits Under Companies Act

Threshold-based Compliances under the Companies Act, 2013 refer to specific statutory obligations triggered when a company meets defined criteria related to paid-up share capital, turnover, or other financial parameters. Examples include the requirement for appointing a Company Secretary for companies with paid-up share capital of ₹10 crore or more, Corporate Social Responsibility (CSR) compliance for companies with a net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more, and filing financial statements in XBRL format for companies with a turnover of ₹100 crore or more. These compliances ensure regulatory adherence based on the size and scale of operations.

By Taxmann’s Research and Advisory Team | Corporate Laws

Table of contents

1. Introduction
2. Compliances Based on Threshold Limits under the Companies Act, 2013
3. Various Meeting Requirements

1. Introduction

With the introduction of the Companies Act, 2013, in 2014, the compliance burden of every Company has increased substantially irrespective of its nature, be it a Private Limited Company, Public Limited Company, Listed Company, Small Company, Section-8 Company, or One-Person Company (OPC).

In order to increase transparency in reporting, the MCA and SEBI frequently come out with new amendments by way of circulars and notifications. Companies must adhere to all the applicable compliances within the specified due dates. Any non-compliance on the part of companies often results in heavy penalties. It is a good practice to track the relevant compliances as per the applicable provisions of the Companies Act, 2013/SEBI as the case may be.

Under the Companies Act 2013, various compliances must be done on a time-to-time basis. For a better understanding of the same, we have categorised the various Compliances on the following basis:

• Event-based Compliance: Compliance is to be done upon the occurrence or happening of a certain event, like filing E-form INC-22 upon shifting the company’s registered office.
• Time-based Compliance: Compliances are to be done on an annual, half-yearly, and quarterly basis, like the Filing of E-form AOC-4 and MGT-7.
• Specific Criteria-Based Compliance: Some compliances are based on paid-up share capital, turnover, or any other specific requirement, such as filing E-Form AOC-4 (XBRL) or appointing a Company Secretary.

In addition to the above-mentioned compliances, a listed company is also required to make various Quarterly, half-yearly, and event-based compliances and disclosures under the following regulations:

• SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
• Compliances under SEBI (Depositories and Participants) Regulations, 2018
• Compliances under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
• Compliances under SEBI (Prohibition of Insider Trading) Regulations, 2015

This write-up also discusses in detail the compliances w.r.t. to holding of Annual General Meeting (AGM), Minimum no. of Board Meetings/Committee Meetings as required under the Law.

2. Compliances Based on Threshold Limits under the Companies Act, 2013

3. Various Meeting Requirements

[1] Sec 177 shall not apply – Exemption Notification to specified IFSC Public Companies, GSR 08 (E) dated 04.01.2017.

[2] Sec 178 shall not apply – Exemption Notification to specified IFSC Public Companies, GSR 08 (E) dated 04.01.2017.

[3] IFSC Public Companies shall hold the first meeting of the Board of Directors within sixty days of its incorporation and thereafter hold at least one meeting of the Board of Directors in each half of a calendar year. –  Exemption Notification to specified IFSC Public Companies, GSR 08 (E) dated 04.01.2017.

[4] IFSC Private Companies shall hold the first meeting of the Board of Directors within sixty days of its incorporation and thereafter hold at least one meeting in each half of a calendar year—Exemption Notification to specified IFSC Private Companies, GSR 09 (E) dated 04.01.2017.

[5] The provisions of the Board meeting shall not apply to an OPC having only 1 Director—Proviso to Section 173 (5).

[6] IFSC Public Companies shall hold the first meeting of the Board of Directors within sixty days of its incorporation and thereafter hold at least one meeting of the Board of Directors in each half of a calendar year. –  Exemption Notification to specified IFSC Public Companies, GSR 08 (E) dated 04.01.2017.

[7] IFSC Private Companies shall hold the first meeting of the Board of Directors within sixty days of its incorporation and thereafter hold at least one meeting in each half of a calendar year—Exemption Notification to specified IFSC Private Companies, GSR 09 (E) dated 04.01.2017.

[8] Section 8 companies shall hold at least one meeting within every six calendar months – Notification no. G.S.R. 466(E) dated 5th June, 2015.

[9] A One Person Company, a small company, a dormant company, and a private company (if such private company is a start-up) 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 Section 173 (5)

[10] The provisions of the Board meeting shall not apply to an OPC having only 1 Director—Proviso to Section 173 (5).

Dive Deeper
Compliances Under Companies Act for Unlisted Public Companies
Compliances Under Companies Act for Private Limited Companies
Compliances Under Companies Act for Section 8 Companies
Compliances Under Companies Act for One Person Company (OPC) and Small Company
Compliances Under Companies Act for Listed Companies