With the objective of providing relaxations to more companies in terms of reduced compliance requirements available to a ‘small company’ under the Companies Act, 2013 (CA2013) and for ease of doing business, the Ministry of Corporate Affairs (MCA) has amended the Companies (Specification of Definition Details) Rules, 2014. With this amendment, for the purposes of definition of “small company”, under Section 2(85) of CA2013, the maximum threshold for both paid up capital and turnover has been increased as follows:
|Pre-amendment threshold||Post amendment threshold|
|Paid Up Capital||INR 2 crore||INR 4 crore|
|Turnover||INR 20 crore||INR 40 crore|
A few exemptions/ relaxations which are available to small company under CA2013 include:
The scope of a “small company” has been amended vide the Companies (Specification of Definition Details) Amendment Rules, 2022 dated September 15, 2022 (available here).
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