MCA Statutory Exemptions: Section 8 Companies, Start-ups & Private Limited Entities
Published on September 20, 2026
TaxAstro Corporate Compliance Desk
Corporate Law & Compliance Advisory Team
Comprehensive regulatory guide detailing statutory exemptions and compliances under Notifications G.S.R. 466(E) and G.S.R. 583(E) for Section 8 companies, recognized DPIIT start-ups, and private limited entities under the Companies Act, 2013.
Specific Provisions for Limited Companies, Section 8, Start-Ups & Non-Share Capital Entities
The Ministry of Corporate Affairs (MCA), Government of India, has established specialized regulatory frameworks and statutory exemptions under the Companies Act, 2013 for non-share capital companies, Section 8 companies, and recognized start-ups to foster ease of doing business while maintaining regulatory oversight.
1. Companies Limited by Guarantee & Non-Share Capital Entities
(Under Part II, Table of Fees, Companies Registration Offices and Fees Rules, 2014)
Incorporation / Registration Fees (Based on Number of Members in AoA):
- Number of members up to 20: ₹2,000
- Number of members between 21 and 200: ₹5,000
- Number of members exceeding 200 (stated): ₹5,000 + ₹10 for every additional member after the first 200
- Number of members stated to be unlimited: ₹10,000 (Statutory Maximum Cap)
Standard Form Filings (E-forms):
- Flat statutory fee of ₹200 per document/form (regardless of transaction size or member strength).
2. Public Limited vs. Private Limited Comparison Points
1. Ineligibility for Small Company Benefits (Section 2(85)):
- A Public Limited Company is statutorily barred from being treated as a "Small Company," regardless of how small its paid-up capital or turnover may be.
- Consequently, Public Limited Companies can never avail the 50% penalty discount under Section 446B and must always pay standard statutory penalties.
2. Minimum Director / Shareholder Overhead at Incorporation:
- Private Limited: Minimum 2 Directors, 2 Shareholders (requiring min. 2 DSCs).
- Public Limited: Minimum 3 Directors, 7 Shareholders (requiring min. 3 DSCs and mandatory appointment of Independent Directors/KMP where threshold rules under Section 149/203 apply).
3. Specific Statutory Exemptions for Section 8 Companies (G.S.R. 466(E))
Pursuant to Central Government Notification No. G.S.R. 466(E) dated 5th June, 2015 issued under Section 462 read with Section 8 of the Companies Act, 2013, Section 8 companies enjoy several critical operational exemptions:
- Capital Requirements: Clauses (68) and (71) of Section 2 do not apply (no minimum paid-up share capital requirement).
- General Meetings & Notice Period (Section 101(1) & Section 136(1)): General meeting notice and financial statement dispatch require a minimum of 14 clear days instead of the standard 21 days.
- AGM Determination (Section 96(2)): The time, date, and place of each AGM may be decided beforehand by the Board of Directors having regard to directions given by the company in its general meeting.
- Minutes of Proceedings (Section 118): Does not apply as a whole, except that minutes may be recorded within 30 days of the conclusion of every meeting where articles provide for confirmation of minutes by circulation.
- Directorship & Board Composition Exemptions: Sections 149(1), 149(4)–(13), 150, 152(5) proviso, 165(1) (directorship limits), and Section 178 (Nomination & Remuneration Committee / Stakeholders Relationship Committee) do not apply.
- Board Meeting Frequency (Section 173(1)): The Board of Directors must hold at least one meeting within every six calendar months (rather than the standard minimum of 4 meetings a year).
- Board Quorum (Section 174(1)): Quorum for Board meetings is either 8 members or 25% of total strength, whichever is less, subject to a statutory minimum of 2 members.
- Audit Committee Relaxation (Section 177(2)): The requirement of independent directors forming a majority in the Audit Committee is omitted.
- Board Powers Exercisable by Circulation (Section 179(3)): Matters referred to in clauses (d), (e), and (f) (borrowing money, investing funds, granting loans/guarantees) may be decided by the Board by circulation instead of at a physical meeting.
- Interested Directors & Related Party Disclosure (Sections 184(2) & 189): Apply only if the transaction with reference to Section 188 on the basis of terms and conditions exceeds ₹1,00,000.
4. Statutory Exemptions & Relaxations for Private Companies & Start-Ups (G.S.R. 583(E))
Pursuant to Central Government Notification No. G.S.R. 583(E) dated 13th June, 2017, significant regulatory relaxations have been extended to private companies and DPIIT-recognized start-ups:
- Cash Flow Statement Exemption (Section 2(40) Proviso): Financial statements with respect to One Person Company (OPC), Small Company, Dormant Company, and Private Company (if recognized as a start-up) may not include the Cash Flow Statement.
- Acceptance of Deposits (Section 73(2)(a) to (e)): Shall not apply to a private company which: (i) accepts from its members monies not exceeding 100% of aggregate paid-up share capital, free reserves, and securities premium; or (ii) is a start-up, for 5 years from incorporation; or (iii) is not an associate/subsidiary, has borrowings < 2× paid-up capital or ₹50 Crores (whichever is lower), and has not defaulted in repayment. (Details of monies accepted must be filed with the Registrar in Form DPT-3).
- Annual Return Signing (Section 92(1) Proviso): For OPCs, Small Companies, and Start-ups, the annual return shall be signed by the Company Secretary, or where there is no CS, by a single Director of the company.
- Internal Financial Controls (IFC) Reporting (Section 143(3)(i)): Does not apply to a private company that is an OPC or Small Company, or which has a turnover < ₹50 Crores and aggregate borrowings from banks/FIs/bodies corporate < ₹25 Crores at any time during the financial year.
- Board Meeting Interval (Section 173(5)): OPCs, Small Companies, Dormant Companies, and Start-ups comply with Section 173 if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than 90 days.
- Interested Director Quorum (Section 174(3)): An interested director in a private company may be counted towards the quorum after full disclosure of interest under Section 184.
- Mandatory Condition Precedent (Paragraph 2A): The above statutory exemptions, modifications, and adaptations are available only to a private company that has not committed a default in filing its financial statements under Section 137 (Form AOC-4) or annual return under Section 92 (Form MGT-7) with the Registrar.
