MCA has clarified the much awaited provision of Small Company as defined under Section 2(85) of the
Companies Act, 2013. According to the existing provision, a
Company is a Small Company, if it meets either of the conditions provided
therein thereby making the second limit unrestricted or inconsequential.
Difficulties have arisen in this regard as companies which, though, meet one of
the criteria but exceed the monetary limit in respect of second criteria
excessively are also getting classified as 'small companies'. Accordingly
through the Companies (Removal of Difficulties) Order, 2015, in Section
2(85)(i), for the word "or" occurring at the end, the word
"and" shall be substituted and now both conditions are simultaneously
required to be complied with.
MCA
MCA through the Companies (Removal of Difficulties) Order, 2015 has provided relief to a banking
company or an insurance company or a housing finance company making acquisition
of securities in its ordinary course of business. The existing provisions, only
provides exemption to the NBFC, making it difficult for the Banking &
Insurance Company to acquire securities. Now the position has been rectified
and new provision has been inserted vide Section 186(11)(b)(iv) to exempt a
banking company or an insurance company or a housing finance company,
making acquisition of securities in the ordinary course of its business.
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