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A private ltd company having share capital of rs.55 lakhs

v.malarvizhi (Audit Assistant) (25 Points)

28 October 2015

A private ltd company having paid up capital of Rs.55 lakhs and turnover of Rs.1.5 crore whether it is small company or not?

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Deepak Gupta (CA Student) (15922 Points)
Replied 28 October 2015

To be classified as a ‘small company’, the company needs to fulfill both the conditions laid down in section 2(85) of the Companies Act, 2013.

i.e. paid-up share capital should not exceed Rs. 50 lakh AND turnover (as per its last P&L account) should not exceed Rs. 2 crore.

The said definition has been amended vide The Companies (Removal Of Difficulties) Order 2015, dated 13.02.2015.

Before the amendment, the requirement was to fulfill either one of the two conditions.

In the given instance, the company is fulfilling only the turnover condition.

Hence, it cannot be classified as a ‘small company’.

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(Guest)

hi guys. please read the MCA order

According to clause (85) of section 2, a company may be treated as a ‘small company’ if it meets either of the conditions provided therein thereby making the second limit unrestricted or inconsequential. Difficulties have arisen in this regard as companies which, though, meet one of the criteria but exceed the monetary limit in respect of second criteria excessively are also getting classified as ‘small companies’;

P.S even if ur company only fulfills one condtion , its still a small company as the other condition is "inconsequential"

Deepak Gupta (CA Student) (15922 Points)
Replied 28 October 2015

Originally posted by : Ubaid
	hi guys. please read the MCA order According to clause (85) of section 2, a company may be treated as a ‘small company’ if it meets either of the conditions provided therein thereby making the second limit unrestricted or inconsequential. Difficulties have arisen in this regard as companies which, though, meet one of the criteria but exceed the monetary limit in respect of second criteria excessively are also getting classified as ‘small companies’; P.S even if ur company only fulfills one condtion , its still a small company as the other condition is "inconsequential"