Caro

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CARO, 2003 AND MAOCARO, 1988 - A COMPARATIVE STUDY MAOCARO, 1988 1. Short title, application and commencement. (1) This order may be called the Manufacturing and Other Companies (Auditor's Report) Order, 1988 ["MAOCARO"] (2) (a) It shall apply to every company including a foreign company as defined in section 591 of the Companies Act, 1956 (1 of 1956) which is engaged or proposes to engage in one or more of the following activities namely:Manufacturing, mining or processing; (ii) Supplying and rendering services; (iii) trading; and (iv) the business of financing, investment, chit fund, nidhi or mutual benefit societies. (b) It shall not apply to (i) a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949); (ii) an insurance company as defined in section 2(21) of the Companies Act, 1956 (1 of 1956); and (iii) a company licensed to operate under section 25 of the Companies Act, 1956 (1 of 1956). (i) 1. CARO, 2003 Short title, application and commencement.

(1) This Order may be called the Companies (Auditor’s Report) Order, 2003 ["CARO"] (2) It shall apply to every company including a foreign company as defined in section 591 of the Act, except the following:a Banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949); (ii) an insurance company as defined in clause (21) of section 2 of the Act; (iii) a company licensed to operate under section 25 of the Act; and (iv) a private limited company with a paid up capital and reserves not more than fifty lakh rupees and has not accepted any public deposit and does not have loan outstanding ten lakh rupees or more from any bank or financial institution and does not have a turnover exceeding five crore rupees. (i)

CARO, 2003 AND MAOCARO, 1988 - A COMPARATIVE STUDY MAOCARO, 1988 Amendment Applicability of ‘MAOCARO’ to different types of companies, classified based on their activities is done away with. ‘CARO’ is applicable to every company including a foreign company as defined in section 591 of the Companies Act, 1956 (‘the Act’), except to: a banking company, an insurance company, a company licensed to operate under section 25 of the Act and to private company meeting specified criteria New exception is added to exclude a private limited company with a paid up capital and reserves Rs.10 lacs and does not have a turnover > Rs.5 crores Comment For a private limited company all the four conditions need to be satisfied, to be eligible for exception from ‘CARO’. By definition, private company by its articles prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives. Hence, the rationale behind the restriction on account of ‘public deposit’ is not clear. CARO, 2003

2. Definitions. – In this Order:(a) “chit fund”, “nidhi” or “mutual benefit” company means a company engaged in the business of managing, conducting or supervising as a foreman or agent of any transaction or arrangement by which it enters into an agreement with a number of subscribers that every one of them shall subscribe to a certain sum of installments for a definite period and that each subscriber, in his turn, as determined by lot or by auction or by tender or in such other manner as may be provided for in the agreement, shall be entitled to a prize amount, and

2. Definitions. – In this Order, unless the context otherwise requires,(a) “Act” means the Companies Act, 1956 (1 of 1956); (b) “chit fund company”, “nidhi company” or “mutual benefit company” means a company engaged in the business of managing, conducting or supervising as a foreman or agent of any transaction or arrangement by which it enters into an agreement with a number of subscribers that every one of them shall subscribe to a certain sum of installments for a definite period

CARO, 2003 AND MAOCARO, 1988 - A COMPARATIVE STUDY MAOCARO, 1988 includes companies whose principal business is accepting...
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