Analysis of amendment to definition of small company u/s 2(85) and key considerations

| Last updated: 04 April 2024

Quick Summary
The definition of a 'small company' under Section 2(85) of the Companies Act, 2013, has been revised. Key changes effective from 15th September 2022, include increased limits for paid-up share capital (up to Rs. 4 crore) and turnover (up to Rs. 40 crore in the preceding financial year). This update aims to expand the pool of small companies, offering them reduced compliance burdens and various exemptions, such as not needing a Cash Flow Statement or CARO reporting, and having fewer board meeting requirements.

The MCA vide its Notification No. G.S.R. 700(E) Dated 15th September, 2022 has yet again revised the definition of Small Company [Section 2(85) of The Companies Act, 2013]. Accordingly, the definition of Small Company under section 2(85) shall be read as under: Small Company means a company, o
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CA Geetika Bhatia

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Chartered Accountant (AIR-33 CA Intermediate)

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