Enquiry:

Section 233(3) of the Companies Act, 2017 exempts private companies having paid up share capital not exceeding ten million rupees from filing of financial statement with the Registrar of Companies. On the other hand section 234 requires private companies having paid up share capital not exceeding one million rupees to file their financial statements with the Registrar.

It transpires that all companies have to file their financial statements with the Registrar of Companies, except private companies having paid up share capital more than one million rupees but not more than ten million rupees. We do not understand the logic to require micro companies to file their financial statements whether audited or unaudited and to exempt the sufficient larger companies having capital up capital up to ten million rupees, from filing of the financial statements.

 

Opinion:

The provisions relating to the audit and filing of financial statements by the companies have been prescribed in section 233 and 234 of the Companies Act, 2017. The filing related requirements are that:

• A private company with share capital less than 1 million is required to file authenticated   financial statements (whether audited or not) with the registrar within thirty days from holding of meeting. (section 234)
• On the other hand, a private company having share capital not exceeding 10 million rupees is not required to file the financial statements with the registrar. (section 233)

We have noted that the above provisions need to be rationalised, as micro/ very small companies (share capital less than one million) have been directed to file their financial statements. Whereas, comparatively large sized companies (having share capital up to ten million rupees) are not mandatorily required to file their financial statements. Further, the Institute has highlighted this anomaly to SECP also.

(October 02, 2017)