1. The Companies (Specification of Definitions Details) Amendment Rules, 2022
On September 15, 2022, MCA vide Notification No.: G.S.R 700(E) amended the definition of Small Company. The scope of Small Company has been widened wherein the Paid-up Share Capital of the Company shall not exceed Rs. 4 Crores instead of Rs. 2 Crores and Turnover of the Company shall not exceed Rs. 40 Crores instead of Rs. 20 Crores. In other words, now a Small Company means a Company having Paid-up Share Capital upto Rs. 4 Crores and Turnover upto Rs. 40 Crores.
The link for the aforesaid notification is as mentioned below:
https://www.mca.gov.in/bin/dms/getdocument?mds=tiMs9IFJ8xuPm%252B%252Foxc6fUw%253D%
253D&type=open
2. Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022
MCA has issued Notification No. G.S.R. 715(E) dated September 20, 2022 and amended the CSR Policy Rules, 2014 (“the Original Rules”). Following are the changes vide the CSR Policy Amendment Rules, 2022 (“the Amended Rules, 2022”):
- The Company to continue to have its CSR Committee, till any amount remain unspent for Ongoing Project and are transferred to a separate Bank Account called as “The Unspent Corporate Social Responsibility Account” which are spent by the Company as per its obligation towards CSR within a period of three financial years from the date of such transfer of funds in the aforementioned Bank Account.
(To this effect Rule 3 (1) has been amended by inserting a proviso vide the Amendment Rules, 2022) - The provisions related to having a CSR Committee and compliance with CSR provisions have been done away with, if in the previous financial year, the Company does not cross the threshold criteria for the applicability of CSR, that is Net Worth of Rs.500 Crore, Turnover of Rs.1000 Crore and Net profit of Rs. 5 Crores.
(To this effect Rule 3 (2) has been deleted vide the Amendment Rules, 2022) - The Company can implement CSR activities or spend CSR expenditure through an implementing agency which can be Section 8 Company or Registered Society or Registered Public Trust, having registration under section 10(23C) of the Income Tax Act issued by the Principal Commissioner or Commissioner, and registered under Section 12A of the Income Tax Act, 1961and having approval under section 80G of the Income Tax Act, 1961 having three years track record in undertaking similar activities or if it is established by the company itself then there is no requirement to have three years track record in undertaking similar activities.
2. Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022
MCA has issued Notification No. G.S.R. 715(E) dated September 20, 2022 and amended the CSR Policy Rules, 2014 (“the Original Rules”). Following are the changes vide the CSR Policy Amendment Rules, 2022 (“the Amended Rules, 2022”):
- The Company to continue to have its CSR Committee, till any amount remain unspent for Ongoing Project and are transferred to a separate Bank Account called as “The Unspent Corporate Social Responsibility Account” which are spent by the Company as per its obligation towards CSR within a period of three financial years from the date of such transfer of funds in the aforementioned Bank Account.
(To this effect Rule 3 (1) has been amended by inserting a proviso vide the Amendment Rules, 2022) - The provisions related to having a CSR Committee and compliance with CSR provisions have been done away with, if in the previous financial year, the Company does not cross the threshold criteria for the applicability of CSR, that is Net Worth of Rs.500 Crore, Turnover of Rs.1000 Crore and Net profit of Rs. 5 Crores.
(To this effect Rule 3 (2) has been deleted vide the Amendment Rules, 2022) - The Company can implement CSR activities or spend CSR expenditure through an implementing agency which can be Section 8 Company or Registered Society or Registered Public Trust, having registration under section 10(23C) of the Income Tax Act issued by the Principal Commissioner or Commissioner, and registered under Section 12A of the Income Tax Act, 1961and having approval under section 80G of the Income Tax Act, 1961 having three years track record in undertaking similar activities or if it is established by the company itself then there is no requirement to have three years track record in undertaking similar activities.
1. The Companies (Specification of Definitions Details) Amendment Rules, 2022
On September 15, 2022, MCA vide Notification No.: G.S.R 700(E) amended the definition of Small Company. The scope of Small Company has been widened wherein the Paid-up Share Capital of the Company shall not exceed Rs. 4 Crores instead of Rs. 2 Crores and Turnover of the Company shall not exceed Rs. 40 Crores instead of Rs. 20 Crores. In other words, now a Small Company means a Company having Paid-up Share Capital upto Rs. 4 Crores and Turnover upto Rs. 40 Crores.
The link for the aforesaid notification is as mentioned below:
https://www.mca.gov.in/bin/dms/getdocument?mds=tiMs9IFJ8xuPm%252B%252Foxc6fUw%253D%
253D&type=open