News- Recently, the Ministry of Corporate Affairs, in a notification, highlighted the change in the definition of small companies under the Companies Act, 2013.
About Companies (Specification of Definition Details) Amendment Rules, 2025
- The Central Government has issued the Companies (Specification of Definition Details) Amendment Rules, 2025, amending the Companies (Specification of Definition Details) Rules, 2014.
- Aim: This amendment aims to bring more companies under the small company definition, which provides them with benefits like simplified compliance and reduced burdens.
- Issued by: It is issued by the Ministry of Corporate Affairs (MCA).
- Effective date: The amendment is effective from December 1, 2025.
- Key changes
- Paid-up capital: The paid-up capital limit for classifying a company as a small company has been increased from ₹4 crore to ₹10 crore.
- Turnover: The turnover limit for treating a company as a small company has been increased from ₹40 crore to ₹100 crore.
About the concept of a “small company”
- Companies Act, 2013 introduced the concept of a “small company” with simplified compliance for businesses.
- The Companies (Specification of Definition Details) Rules, 2014 set the financial thresholds.
- The 2025 Amendment continues efforts to revise limits and support ease of doing business by updating capital and turnover criteria.
