Wednesday, 26 July 2017

MCA Clarification regarding applicability of exemption u/s 143(3)(i) of Companies Act, 2013

MCA Update:

Clarification regarding applicability of exemption u/s 143(3)(i) of Companies Act, 2013

Ministry of Corporate Affairs (MCA) has issued a circular dated 25th July, 2017 clarifying the year from which the exemption u/s 143(3)(i) of the Act will be applicable to certain private limited companies.

Earlier, MCA had issued a notification dated 13th June, 2017 amending its previous notification dated 05th June, 2015 which has prescribed exemptions for Private Limited Companies. By this new notification dated 13th June, 2017, alongwith other matters, MCA has given exemption that Auditor is not required to mention details about internal financial control for certain private companies (small companies, OPCs and other specified Private companies).

However, it was not clear from which year this exemption can be implemented. Upon seeking clarifications by stakeholders, MCA by issuing the Circular dated 25th July, 2017 has clarified that this exemption shall be applicable to those audit reports in respect of financial statements pertaining to financial years commencing on or after 01st April, 2016 which are made on or after 13th June, 2017.

Copy of this Circular can be accessed at below link:
http://www.mca.gov.in/Ministry/pdf/GeneralCircular8_25072017.pdf

Copy of Notification dated 13th June, 2017 can be accessed at below link:
http://egazette.nic.in/WriteReadData/2017/176689.pdf

WBR
Prkverma