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    Applicability of CARO, 2020 on private companies

    Posted By : Juhee Goyal / Published on : 28-Mar-2023 04:49 AM / View : 237 / Comment : 1

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    Hi Everybody!

    Whether the applicability of CARO in private companies is calculated on the basis of consolidated turnover or on the basis of standalone turnover?
    Read more on : companies private caro applicability

    • The Companies (Auditor's Report) Order, 2020 (CARO, 2020) is an order issued by the Ministry of Corporate Affairs (MCA) that prescribes the manner in which auditors are required to report on certain aspects of a company's financial statements. CARO, 2020 applies to all companies registered in India, including private companies, except for certain exempted categories.

      The applicability of CARO, 2020 on private companies depends on their turnover or borrowing limits. CARO, 2020 applies to private companies that meet any one of the following criteria:

      1. The company's annual turnover exceeds INR 50 crore (approximately USD 6.7 million) during the financial year.

      2. The company's outstanding loans or borrowings exceed INR 5 crore (approximately USD 670,000) at any point during the financial year.

      3. The company's paid-up share capital and reserves exceed INR 10 crore (approximately USD 1.3 million) at any point during the financial year.

      Private companies that do not meet any of the above criteria are exempt from complying with the provisions of CARO, 2020.

      It is important to note that while private companies may be exempt from complying with certain aspects of CARO, 2020, they are still required to comply with other statutory requirements under the Companies Act, 2013 and other applicable laws and regulations. Therefore, it is important for private companies to consult with their auditors and legal advisors to ensure that they are in compliance with all applicable statutory requirements.

      28-03-2023 / 11:49:13 AM
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