Ministry of Corporate Affairs notifies changes in the definition of ‘Small Companies’

Tags: Economy/Finance

The Union Ministry of Corporate Affairs has notified changes in the definition of the Small Companies through a notification issued on 15 September 2022. 

It has increased the paid capital limit of the company and the turnover limit. 

IMPORTANT FACTS -

Definition of Small Companies :

• The Companies Act 2013, introduced the concept of small companies in India.
• The Act defines a small company as a company that is not a public company and has:
• (i) Paid up  share capital of the company shall not exceed Rs 4 crores (Rs 2 crore) 
• (ii) The turnover of the company shall not exceed Rs 40 crore (earlier Rs 20 crore) during the immediately preceding financial year. 
• However the concept of Small Companies does not apply to the following companies:
• (i) Public Companies 
• (ii) Holding company or a subsidiary company 
• (iii) A company registered under section 8 of the Companies Act.
• (iv) A company or body corporate government by any special act.
• Union Minister  for Corporate Affairs : Nirmala Sitharaman