Corporate Laws & MCA Compliance

Under the Companies (Acceptance of Deposits) Rules, a private company can accept unsecured loans from RELATIVES of a director of the company without statutory deposit ceiling limits, subject to key compliance conditions:

• The concerned relative must furnish a written declaration to the company confirming that the amount given is not out of funds borrowed or accepted by him/her from other sources.
• The company must maintain a permanent record of all such accepted loan accounts and terms of repayment.
• Full and transparent disclosure of the details of money so accepted is required in the Board’s Report accompanying the annual financial statements.

The objective of this Guidance Note issued by the Institute of Chartered Accountants of India (ICAI) is to provide uniform principles on the recognition, measurement, presentation, and disclosure of expenditure on activities relating to Corporate Social Responsibility under Section 135 of the Companies Act, 2013:

• The Guidance Note clarifies that CSR expenditure should be recognized as an expense in the Statement of Profit and Loss when incurred.
• Where a company spends an amount exceeding the statutory 2% mandate, the excess amount cannot generally be carried forward unless specific conditions under amended rules are satisfied.
• Unspent amounts relating to ongoing CSR projects must be transferred to a designated "Unspent CSR Account" in a scheduled bank within 30 days from the end of the financial year.

Section 143(3)(i) of the Companies Act, 2013 mandates that the statutory auditor’s report must state whether the company has an adequate internal financial controls system in place and the operating effectiveness of such controls over financial reporting.

Modi Consultancy and G. R. Modi & Co. provide comprehensive IFC documentation, risk-control matrix (RCM) development, and process walkthrough testing to ensure corporate management is thoroughly prepared for statutory reporting.