What's the change?
MCA has introduced revision to definition of "Small Company" through Companies (Specification of Definition Details) Amendment Rules 2025, which came into effect on 1st December 2025.
Details of the change:
Coming to the amendment,
The threshold for classifying a company as "small" has been amended. A private company qualifies as small company, only if its:
- paid-up share capital does not exceed ₹10 crore. (Previously ₹4 crore) and
- its annual turnover does not exceed ₹100 crore.(Previously ₹40 crore)
Benefits of this revision:
Many more private companies now qualify as “small companies” under the Companies Act, 2013. By raising the thresholds for both paid-up capital and turnover, the government has widened the ambit so that a larger pool of businesses can enjoy the compliance relaxations.
Reduced Compliance Burden and Ease of business by providing the benefit of :
- Encourages new business by lowering regulatory requirements.
- Simplified annual return filing (can be signed by a director instead of a company secretary. Thus cuts down administrative hurdles and professional cost, which matters very much for a small business.
- Reduced fees for filing forms with MCA.