Investment Valuation in India

The Companies Act 2013 has promoted structured business organisation even for individuals. Why run an uncontrolled, unregulated sole proprietorship business when you can be guided and recognised by an Act? Even if you are an individual, you can now create and run a company under Companies Act 2013 - a ONE PERSON COMPANY.  Section 2(62) defines One Person Company as a company which has only one person as a member. Here are some things that you should know about One Person Company: One Person Company (OPC) is a private company   The said member (shareholder) should be a natural person. The words “One Person Company” shall be mentioned in brackets below the name of the company, wherever it is printed, affixed or engraved [Section 12(3) second proviso]. The memorandum of OPC shall indicate the name of the person who shall become the member of the company in the event of the death of the subscriber. The name of such person can also be changed by the member [Sectio...

The provisions related to rotation of auditor are applicable to those companies which are prescribed in Companies (Audit and Auditors) Rules, 2014, which prescribes the following classes of companies excluding one person companies and small companies , namely: (a) all unlisted public companies having paid up share capital of rupees ten crore or more ; (b) all private limited companies having paid up share capital of rupees twenty crore or more ; (c) all companies having paid up share capital of below threshold limit mentioned in (a) and (b) above, but having public borrowings from financial institutions, banks or public deposits of rupees fifty crores or more . As per section 139(2) of the Companies Act, 2013, no listed company or a company belonging to such class or classes of companies as mentioned above, shall appoint or re-appoint- (a) an individual as auditor for more than one term of 5 consecutive years; and (b ) an audit firm as auditor ...

The financial statements would include Cash Flow Statements and A Statement of Changes in Equity. Sec 2(40) of the Companies Act defines Financial Statements as follows: “ financial statement ” in relation to a company, includes— (i) a Balance Sheet as at the end of the financial year; (ii) a Profit and Loss Account, (Income and Expenditure Account for not-for-profit companies) for the financial year; (iii) Cash Flow Statement for the financial year; (iv) a Statement of Changes in Equity, if applicable; and (v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv): One Person Company, Small Company, Dormant Company are NOT required to prepaare Cash Flow Statement. Sec 2(85) defines Small Companies as: ‘‘small company’’ means a company, other than a public company,— (i) Paid-Up Share Capital does not exceed Rs 50 Lakhs   [or such higher amount as may be prescribed which shall not be more than ...