Forums
Back
CARO
Auditing
In CARO Applicability, as there is Expemtion for Small Companies, why has the Lawmakers Placed Private Companies Conditions as Most Companies will be Exempt under Small Companies and no need for Private Companies Conditions. Kindly Explain with Example where Private Companies rules is used.
Answers (6)
As far as I heard from my friends and lectures, wat they said is that if a company get SMALL COMPANY status Dey will be exempt staight away Dey dont need to check pvt company criteria, on other hand if Dey are not given the status of small company Dey shud check the criteria...
Kiran Vijay
As far as I heard from my friends and lectures, wat they said is that if a company get SMALL COMPANY status Dey will be exempt staight away Dey dont need to check pvt company criteria, on other hand if Dey are not given the status of small company Dey shud check the criteria...
as per New Amendments, Small Company is Company with Share Capital and Turnover less than 2 and 20 Crs Respectively. and CARO Private Company Says that the Turnover is less than 10 Crs, Paidup Capital and Reserves less than1 Crs and Borrowings less than 1 Crs. if small Comapy Condition provides to all private companies less than 20 Crs and 2 crs paidup Capital, why there is private Company Conditions
Thread Starter
Vijay adithyaas per New Amendments, Small Company is Company with Share Capital and Turnover less than 2 and 20 Crs Respectively. and CARO Private Company Says that the Turnover is less than 10 Crs, Paidup Capital and Reserves less than1 Crs and Borrowings less than 1 Crs. if small Comapy Condition provides to all private companies less than 20 Crs and 2 crs paidup Capital, why there is private Company Conditions
Yes the same doubt for me too , A company satisfiying the conditions of small company will definetely satisfy the conditions of non applicability of CARO for private companies , then why is there a seperate condition for private companies .
You guys will be good auditors in future! There are two things you need to understand. - The definition of small companies has been amended from time to time increasing the limit. With latest amendments taking the limit higher than those prescribed for private limited companies under CARO. - Small company talks about paid up capital whereas CARO for Pvt Ltd talks about Paid up capital and reserves and surplus. So if say a company has paid up capital of 5 crores, it is not a small company. Then you need to look at pvt ltd company requirement. And if this company has accumulated losses of 4.5 crores, the Paid up + R&S is less than 1 crore. These situations may be rare though.
Your Reply