MCA expands small firm definition, raises turnover and borrowing limits

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The Ministry of Corporate Affairs (MCA) has expanded the definition of small and medium companies (SMC) raising their turnover and borrowing limits.

- Small and Medium Companies are unlisted entities
  - that are not banks, financial institutions, or insurance firms.
  - turnover not exceeding Rs. 250 crores (up from 50 crores).
  - and borrowings, not more than 50 crores (up from 10 crores).

- The threshold of Small and Medium Companies (SMC) has been increased to enable a wider set of companies to follow simplified accounting standards.
- The simplified accounting standards involve less complexity in its application in terms of the number of required disclosures which are less onerous.

Source: Business Standard