MCA expands small firm definition, raises turnover and borrowing limits

What is the News?

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

What are Small and Medium Companies?

• • 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).

Why has the definition been changed?

• • 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