Companies Act 2013 · Section 462 · MCA notifications
Exemptions to Government companies
Under section 462, the Central Government can exempt a class of companies from provisions of the Act, or apply them with modifications. For government companies, this was done by MCA Notification G.S.R. 463(E) dated 5 June 2015, as later amended . The table lists each exemption section by section, in plain English.
Condition: Paragraph 2A (inserted by G.S.R. 582(E), 13.06.2017): the exceptions in the whole Table apply only to a Government company that has not defaulted in filing its financial statements under section 137 or its annual return under section 92. Paragraph 2: shareholders' interests must be protected. Many rows apply only to wholly government-owned companies or need prior approval of the administrative Ministry or Department (see each row).
Last checked: 23 October 2026 against the notifications and their amendments.
32 exemptions, section by section
| Section | Provision | Exemption or modification | Condition / status |
|---|---|---|---|
| 2(45) | Definition of "Government company" Chapter I |
An Explanation is inserted: where shares with differential voting rights have been issued, the 51% "paid-up share capital" test is read as "total voting power". | In force Inserted as serial 1 by G.S.R. 151(E) dated 02.03.2020 |
| 4(1)(a) | Name clause of the memorandum Chapter II |
A Government company need not end its name with "Limited" (public) or "Private Limited" (private). | In force G.S.R. 463(E) serial 1; renumbered 1A by G.S.R. 151(E) dated 02.03.2020 |
| 56(1) | Transfer of securities Chapter IV |
Two provisos are inserted. A stamped and executed transfer instrument is not needed for bonds issued by a Government company if the transferee sends an intimation (name, address, occupation) with the bond certificate, or the allotment letter if there is no certificate. Section 56(1) also does not apply to securities held by nominees of the Government. Wording read from a poor-quality scan of the 2015 Gazette, cross-checked with secondary summaries. |
In force G.S.R. 463(E) |
| 89 | Declaration of beneficial interest in shares Chapter VII |
Section 89 does not apply. | In force G.S.R. 463(E) |
| 90 | Investigation of beneficial ownership (now: register of significant beneficial owners) Chapter VII |
Section 90 does not apply. When this row was made, section 90 dealt with investigation of beneficial ownership. Section 90 was wholly substituted by Act 1 of 2018 (w.e.f. 13.06.2018) to create the significant beneficial owner regime. The notification was not updated. Whether the exemption extends to the new section 90 is not settled in any MCA clarification found; confirm before relying on it. |
In force (scope uncertain) G.S.R. 463(E) |
| 96(2) | Place of the annual general meeting Chapter VII |
The AGM may be held at the registered office, at another place within the city, town or village of the registered office, or at another place approved by the Central Government. | In force G.S.R. 463(E) / serial 5 substituted by G.S.R. 582(E) dated 13.06.2017 |
| Second proviso to 123(1) | Dividend out of accumulated profits when profits are inadequate Chapter VIII |
The rule-based conditions for declaring dividend out of previous years' accumulated profits do not apply to a wholly government-owned company. | A Government company whose entire paid-up share capital is held by the Central Government, any State Government(s), or the Central Government and one or more State Governments. In force G.S.R. 463(E) |
| 123(4) | Depositing dividend in a separate bank account within 5 days Chapter VIII |
Section 123(4) does not apply to a wholly government-owned company, or to one wholly owned by one or more Government companies. | A Government company whose entire paid-up share capital is held by the Central Government, any State Government(s), or the Central Government and one or more State Governments, or by one or more Government companies. In force G.S.R. 463(E) |
| 129 | Financial statements: segment reporting Chapter IX |
Section 129 does not apply to companies engaged in defence production, to the extent of the relevant Accounting Standard on segment reporting. The 2015 text referred to AS-17 only; the 2018 substitution covers the relevant segment-reporting standard (so Ind AS 108 as well). S.O. 802(E) text taken from secondary sources; its existence and date are confirmed in the primary note to G.S.R. 151(E). |
Only for companies engaged in defence production. In force G.S.R. 463(E) / serial 8 substituted by S.O. 802(E) dated 23.02.2018 |
| 134(3)(e) | Board's report: policy on directors' appointment and remuneration Chapter IX |
Section 134(3)(e) does not apply. Since Act 1 of 2018 (w.e.f. 31.07.2018), section 134(3)(e) applies only to companies covered by section 178(1). For a Government company outside section 178(1), the Act no longer requires it anyway; the row matters only for Government companies covered by section 178(1). |
In force (partly overtaken) G.S.R. 463(E) |
| 134(3)(p) | Board's report: formal evaluation of board performance Chapter IX |
The statement on formal annual evaluation need not be given where directors are evaluated by the administrative Ministry or Department of the Central Government, or the State Government, under its own method. | Only where the administrative Ministry/Department or State Government evaluates the directors. In force G.S.R. 463(E) |
| 149(1)(b) and first proviso to 149(1) | Maximum of 15 directors Chapter XI |
The 15-director maximum and the special resolution needed to exceed it do not apply. | In force G.S.R. 463(E) |
| 149(6)(a) | Independent director: opinion of the Board Chapter XI |
The opinion that a person has integrity and relevant expertise is formed by the administrative Ministry or Department of the Central Government, or the State Government, instead of the Board. | In force G.S.R. 463(E) |
| 149(6)(c) | Independent director: no pecuniary relationship Chapter XI |
The pecuniary-relationship test for independent directors does not apply. Section 149(6)(c) was substituted by Act 1 of 2018; the row still refers to clause (c). |
In force G.S.R. 463(E) |
| 152(5) | Director's consent to be filed Chapter XI |
Section 152(5) (filing of consent within 30 days, and the explanatory statement for an independent director) does not apply where the director is appointed by the Central or State Government. | Only where the Central or State Government appoints the director. In force G.S.R. 463(E) |
| 152(6) and (7) | Retirement of directors by rotation Chapter XI |
The rotation rules do not apply to an unlisted Government company in which at least 51% of paid-up capital is held by the Central and/or State Governments, or to its subsidiary. The 2015 version was limited to wholly owned Government companies and their wholly owned subsidiaries. |
Unlisted Government company with at least 51% government holding, or a subsidiary of such a company. In force G.S.R. 463(E) / serial 15 substituted by G.S.R. 582(E) dated 13.06.2017 |
| 160 | Right of persons other than retiring directors to stand for directorship Chapter XI |
Section 160 does not apply. | A Government company whose entire paid-up share capital is held by the Central Government, any State Government(s), or the Central Government and one or more State Governments; or its subsidiary whose entire paid-up capital is held by that Government company. In force G.S.R. 463(E) |
| 162 | Directors to be voted on individually Chapter XI |
Section 162 does not apply. | A Government company whose entire paid-up share capital is held by the Central Government, any State Government(s), or the Central Government and one or more State Governments; or its subsidiary whose entire paid-up capital is held by that Government company. In force G.S.R. 463(E) |
| 163 | Proportional representation for appointing directors Chapter XI |
Section 163 does not apply. | A Government company whose entire paid-up share capital is held by the Central Government, any State Government(s), or the Central Government and one or more State Governments; or its subsidiary whose entire paid-up capital is held by that Government company. In force G.S.R. 463(E) |
| 164(2) | Disqualification of directors for company defaults Chapter XI |
The disqualification under section 164(2) (for non-filing for 3 years, or failure to repay deposits or debentures) does not apply. | In force G.S.R. 463(E) |
| 170 | Register of directors and key managerial personnel Chapter XI |
Section 170 does not apply. Read from a poor-quality scan; the section number is confirmed by two independent secondary summaries. Commentators note it is doubtful that this removes the duty to file the director appointment return (DIR-12), which is under section 170(2); confirm before publishing any statement on DIR-12. |
A Government company whose entire paid-up share capital is held by the Central Government, any State Government(s), or the Central Government and one or more State Governments. In force G.S.R. 463(E) |
| 171 | Members' right to inspect the register Chapter XI |
Section 171 does not apply. | A Government company whose entire paid-up share capital is held by the Central Government, any State Government(s), or the Central Government and one or more State Governments. In force G.S.R. 463(E) |
| 177(4)(i) | Audit committee: auditor recommendation Chapter XII |
The audit committee recommends only the auditors' remuneration, not their appointment and terms of appointment (auditors of Government companies are appointed by the Comptroller and Auditor-General). | In force G.S.R. 463(E) |
| 178(2), (3) and (4) | Nomination and remuneration committee functions Chapter XII |
These sub-sections do not apply, except for the appointment of senior management and other employees. | In force G.S.R. 463(E) |
| 185 | Loans to directors Chapter XII |
Section 185 does not apply if the company obtains approval of the administrative Ministry or Department of the Central Government, or the State Government, before making the loan or giving the guarantee or security. Section 185 was substituted by Act 1 of 2018 (w.e.f. 07.05.2018); the row still refers to "section 185". The serial number (24) and condition are read from a badly scanned Gazette page and a secondary summary. |
Prior approval of the administrative Ministry/Department or State Government. In force G.S.R. 463(E) |
| 186 | Loans, guarantees and investments Chapter XII |
Section 186 does not apply to (a) a Government company engaged in defence production, or (b) an unlisted Government company that obtains prior approval of its administrative Ministry or Department, or the State Government, before the loan, guarantee, security or investment. | (a) Defence production; or (b) unlisted company with prior Ministry/Department or State Government approval. In force G.S.R. 463(E) |
| First and second provisos to 188(1) | Related-party transactions: members' approval and voting bar Chapter XII |
These provisos do not apply to (a) contracts with another Government company, the Central Government, any State Government or any combination of them; or (b) for an unlisted Government company, any other contract approved in advance by its administrative Ministry or Department, or the State Government. The 2020 substitution added contracts with the Central and State Governments to clause (a). |
(b) needs prior approval and applies only to an unlisted Government company. In force G.S.R. 463(E) / serial 26 substituted by G.S.R. 151(E) dated 02.03.2020 |
| 196(2), (4) and (5) | Term and approval of managing director, whole-time director or manager Chapter XIII |
The 5-year maximum term and the board and general-meeting approval requirements do not apply. | In force G.S.R. 463(E) |
| 197 | Overall limit on managerial remuneration Chapter XIII |
Section 197 does not apply. | In force G.S.R. 463(E) |
| 203(1) to (4) | Key managerial personnel Chapter XIII |
A new sub-section (4A) is inserted: sub-sections (1) to (4) do not apply to the managing director, chief executive officer or manager (or, in their absence, a whole-time director) of a Government company. Wording of the inserted sub-section read from a poor-quality scan and cross-checked with a secondary summary. |
In force G.S.R. 463(E) |
| 230 to 232 | Compromises, arrangements and amalgamations Chapter XV |
For a Government company, "Central Government" is read instead of "Tribunal" wherever it occurs in sections 230 to 232, so these schemes go to the Central Government, not the National Company Law Tribunal. | In force Inserted as serial 29A by G.S.R. 582(E) dated 13.06.2017 |
| 439(2) | Who may file a complaint for an offence Chapter XXIX |
The words "the Registrar, a shareholder of the company, or of" are omitted from section 439(2), so a court takes cognizance of an offence by a Government company or its officers only on a complaint by a person authorised by the Central Government (the SEBI route is kept). Read from a poor-quality scan and secondary summary. This is a procedural row; any question about an actual prosecution needs an advocate. |
In force G.S.R. 463(E) |
Amendments to G.S.R. 463(E)
- G.S.R. 582(E) dated 13 June 2017: Substituted serial 5 (section 96(2) AGM venue) and serial 15 (section 152(6),(7) rotation). Inserted serial 29A (sections 230 to 232: "Central Government" for "Tribunal"). Inserted paragraph 2A, the no-default condition on the whole Table.
- S.O. 802(E) dated 23 February 2018: Substituted serial 8 (section 129): the defence-production exemption now refers to "the relevant Accounting Standard on segment reporting" instead of AS-17 only. Existence and date confirmed in the note to G.S.R. 151(E); wording taken from secondary reproductions.
- G.S.R. 151(E) dated 2 March 2020: Replaced serial 1 with new serial 1 (section 2(45): for differential-voting-rights shares, "paid-up share capital" means "total voting power") and serial 1A (the old section 4 entry). Substituted serial 26 (section 188 provisos), extending relief to contracts with the Central or State Governments.
Other section 462 exemptions
Exemptions to Section 8 companies (G.S.R. 466(E)) · Exemptions to private companies (G.S.R. 464(E)) · · all section 462 exemptions
Sources: MCA notifications under section 462 published in the Gazette of India (web.archive.org, web.archive.org, web.archive.org, www.simpliance.in, www.cabkgoyal.com, taxguru.in, ibclaw.in ). This page is a plain-English guide, not the notification text. Check the official notification before relying on an exemption.