Amendment in definition of Small Company

Date: Feb 10, 2026 Day: Tuesday MCA

Amendment in definition of Small Company, as per G.S.R. 880(E).— The Companies (Specification of definition details) Amendment Rules, 2025

The Ministry of Corporate Affairs (MCA) has revised the definition of small companies by increasing the thresholds for paid-up capital and Turnover. The change has been introduced through an amendment to Rule 2(1)(t) of the Companies (Specification of definition details) Rules, 2014, and is effective from December 1, 2025.

Section 2(85) of the Companies Act, 2013 and Rule 2(1)(t) of the 2014 Rules now defines a “Small company’’ as a company, other than a public company whose-

(i) paid-up share capital of not be more than 10(ten) crore rupees and

ii) Turnover of which as per its last profit and loss account does not exceed 100 (hundred) crores rupees.

The proviso to Section 2(85) clarifies that the definition does not apply to:

·         a holding company or a subsidiary company;

·         a company registered under Section 8;

·         a company or body corporate governed by any special Act.

The definition has been amended several times since the Act came into force.

Small Company Thresholds Over Time

This evolution reflects a policy objective to:

·         Promote ease of doing business

·         Reduce compliance burden for smaller enterprises

·         Support growth of MSMEs, startups, and private firms

For more details, please click on given link:

https://www.mca.gov.in/bin/ebook/dms/getdocument?doc=NTk3MTc2NzQz&docCategory=Notifications&type=open