small company under Companies Act 2013

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To be classified as a 'Small Company' under the Companies Act 2013, a company must satisfy both the paid-up capital and turnover criteria simultaneously. It's an 'and' condition, not an 'or' condition. Additionally, private limited companies with paid-up capital exceeding Rs. 4 Crores must dematerialise their shares, regardless of their turnover.

Kowsalya

Kowsalya (Querist)

03 May 2024 To qualify the Company as a Small Company, is it necessary to fulfill both the paid-up capital and turnover criteria, or is it sufficient to meet just one of them? Kindly clarify.

Thanks in Advance

Nikhil Kaushik

Nikhil Kaushik (Expert)

03 May 2024 definition is clear - both conditions are to be met. Its "and", not "or"

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Kowsalya

Kowsalya (Querist)

03 May 2024 Is dematerialsation of shares mandatory for a private limited company with the paid up capital more than Rs. 4 Crores but the turnover is less than Rs.40 Crores? Kindly Clarify

Thanks In Advance

Nikhil Kaushik

Nikhil Kaushik (Expert)

03 May 2024 you will have to dematerialize your shares.

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Nikhil Kaushik

Nikhil Kaushik (Expert)

03 May 2024 this article may be of help for comprehensive understanding of the issue: https://www.equitylist.co/blog-post/dematerialisation-of-shares-by-private-companies-mcas-rule-9b#:~:text=Rule%209B%20dictates%20that%20companies,process%20is%20September%2030th%2C%202024.

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Kowsalya

Kowsalya (Querist)

03 May 2024 Thank you so much for your prompt response sir

Nikhil Kaushik

Nikhil Kaushik (Expert)

03 May 2024 you are most welcome Kowsalya.

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