Small Company threshold of paid-up capital increased to Rs. ten crores and turnover to Rs. hundred crores w.e.f. 1st December 2025.
What is a small company?
Answer: Before the amendment, as per section 2(85) of the Companies Act 2013, to pass the test of a small company it has to be a company other than a public company and further pass the following two tests:
(a) it’s paid-up share capital should not exceed fifty lakh rupees or such higher amount as may be prescribed (upper cap is ten crore rupees) and
(b) its turnover (in the immediately preceding financial year) should not exceed four crore rupees or such higher amount as may be prescribed (upper cap is one hundred crore rupees).
The MCA by notification G.S.R. 880(E) dated 01/12/2025 has notified the Companies (Specification of definition details) Amendment Rules, 2025. The definition of a small company in India has been amended by prescribing the existing upper limits of Rs. ten crores and Rs. 100 crores as the cap of paid up capital and turnover respectively of a small company.
The revised threshold before and after the amendment is as under:
| Before amendment | after amendment | |
| Threshold of paid up capital | 4 crores | 10 crores |
| Threshold of turnover | 40 crores | 100 crores |
However, it is to be noted that the following companies shall not be considered as Small Companies even if they meet the above limits of paid up capital and turnover:
Public companies
Holding companies
Subsidiary companies
Section 8 (non-profit) companies
Companies governed by special Acts
Key Benefits of being a Small Company
Lower compliance burden – Minimum 2 board meetings per year (instead of four meetings)
No need for cash-flow statements in financial statements
Simple balance sheet, profit & loss & notes
Simplified Annual Return to be filed
Many penalties under the Act are reduced for small companies
No auditor rotation requirement
Board’s Report can be signed by one director
Read earlier amendments to paid-up capital and turnover:
Notification dated 15th September, 2022 Click here >>
Notification dated 1st February 2021 Click here >>
Section 292C of the Income Tax Act 1961 indeed carries presumption of correctness of such seized documents contents but only…
PCIT directed to consider condonation of delay u/s 119(2)(b) in filing revised return to availing benefits of section 44ADA In…
Whether condition of pre-deposit prior to reference to Arbitration is arbitrary and violative of the right to sue – Division…
Frequently asked Questions on Foreign Assets of Small Taxpayers Disclosure Scheme and Rule 2026. CBDT has released a FAQs on…
Foreign Assets of Small Taxpayers- Disclosure Scheme Rules 2026 notified. Rule come into force on the 16th day of August,…
Order u/s 69 of the CGST Act authorising arrest of a person has to be communicated to him before arrest–…