Small Company

A small company is a company, other than a public company, that stays within the size limits fixed under Section 2(85) of the Companies Act, 2013, and therefore qualifies for lighter compliance. It must satisfy both tests: paid-up share capital not exceeding Rs 10 crore, and turnover (as per the profit and loss account of the immediately preceding financial year) not exceeding Rs 100 crore. These thresholds were raised from the earlier Rs 4 crore/Rs 40 crore limits with effect from 1 December 2025 through MCA Notification G.S.R. 880(E).

Current thresholds

Criterion	Limit
Paid-up share capital	Up to Rs 10 crore
Turnover (preceding FY)	Up to Rs 100 crore

Who cannot qualify

Regardless of size, the status is never available to:

• a holding company or a subsidiary company;
• a company registered under Section 8 (non-profit);
• a company or body corporate governed by any special Act.

Compliance relaxations

• Only two board meetings a year, one in each half of the calendar year with a gap of at least 90 days (Section 173(5)).
• No cash flow statement required in the financial statements (proviso to Section 2(40)).
• Annual return filed in the abridged Form MGT-7A (Section 92).
• Mandatory rotation of auditors under Section 139(2) does not apply.
• Reduced monetary penalties for certain defaults (Section 446B).