While the Companies Act, 2013 introduced many new concepts in the corporate world. “Small Company” was one of such, which gained a lot of attention of stakeholders and has continued till date. Let it be from the point of compliances under the Companies Act or any other Act, identifying whether the company comes within the ambit of “small company definition” plays a very crucial role. In this article, we will try to understand “Small Company” and how it impacts a company as a whole....

Ministry of Corporate Affairs vide Notification G.S.R. 206(E) dated 24th March 2021, introduced an amendment to the Rule 11 of the Companies (Audit and Auditors) Rules, 2014. These rules are called as Companies (Audit and Auditors) Amendment Rules, 2021 and they shall come into force from 1st April 2021. Vide this amendment notification the MCA omitted clause (d) of Rule 11 and inserted three new clauses i.e. clause (e), clause (f) and clause (g)....

Legal Framework: Foreign Exchange Management Act, 1999 (FEMA) came into force on 1st June 2000. The legal framework for administration of exchange control (i.e. current account transactions and capital account transactions) in India is provided by the FEMA. In terms of Section 5 of the FEMA, persons are free to buy or sell foreign exchange for any current account transaction except for those transactions on which the Central Government has imposed restrictions, vide its Notification No....

What is a subsidiary company? In simple terms, a subsidiary company means a company that is controlled by some other company, and that some other company or controlling company is called a holding company. To become a subsidiary the holding company must have control more than one half (i.e. more than 50%) of the total voting power or power to appoint or remover the majority of the Directors of such a subsidiary....

Who is the Cost Accountant? Cost accountant means a cost accountant as defined in clause (b) of the sub-section (1) of Section 2 of the Cost and Works Accountants Act, 1959 and who holds a valid certificate of practice under sub-Section (1) of Section 6 of the Act. To conduct the cost audit, the person should be a member of the Institute of Cost Accountants of India, constituted under the Cost and Works Accountants Act, 1959 and shall hold a valid membership and certificate of practice....

Meaning of Cost Audit: Cost audit is nothing but the verification of cost records and accounts and checking on the accuracy in adherence to the prescribed cost accounting procedures, plans and principles.Cost audit is nothing but verification of particulars related to utilisation of material, labour and other cost related variants for a given period of time. Objectives of Cost Audit: The main motive of cost audit is to determine the costs of various fixed and variable costs....

It is mandatory for every company registered under the Companies Act, to get its accounts audited by the statutory auditor and present it before the stakeholders every year. An audit is an important activity for every business and the auditor must present his views in an unbiased way. The principle of Audit Rotation implies the periodic breaks to audit engagements and is imposed to avoid long term relationships between an auditor and the client....

What is a share certificate? Share certificate is a document issued by the company evidencing the number of shares held by a person named therein. It is the Prima facie evidence of the title of the person to such shares. In simple terms, a share certificate indicates the person so named owns the shares mentioned therein. The Companies Act, 2013 mandates every company incorporated in India and having share capital, to issue share certificate to their shareholders within such period and in such format as is prescribed under the Act....

A share certificate is a prima facie evidence of the title of the person holding the shares in the company. The shares are movable property and transferable in nature. Shares of a company can be in physical or Demat form. Every share in a company having share capital is distinguished by its distinctive number. As the shares are transferable, how to transfer them? In this article, we will understand the procedure to be followed by a shareholder when he is holding shares of a private limited company and wishes to transfer his shares....

Introduction An Auditor of the company plays the most important and vital role in the operations of the company. He is obligated by the laws to examine the accounts of the company and provide a true and fair view of the company’s financial position to the various stakeholders such as investors, government authorities, banks and other interested parties. As per Section 139 of the Companies Act, 2013, every company is required to appoint an auditor....