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Small Company

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Pramod Limaye

37 Points Posted on 14 March 2021

If a company has turnover more than Rs 2 crores but paid up share capital less than Rs 50 Lakhs, then is it a small company?

Replies (3)

Quick Summary

This discussion clarifies the definition of a 'small company' in India. It explains that a company is considered small if its paid-up share capital does not exceed Rs 50 Lakhs and its turnover does not exceed Rs 2 Crores, as per the initial criteria. However, recent amendments effective from April 1, 2021, have revised these limits to a paid-up capital of Rs 2 Crores and a turnover of Rs 20 Crores. It's important to note that not all companies qualify, with exclusions for holding/subsidiary companies, Section 8 companies, and those governed by special acts.

Amit Maity

63 Points Posted on 14 March 2021

Section 2 (85) "small company‘‘ means a company, other than a public company,—

(i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may
be prescribed which shall not be more than five crore rupees; and

(ii) turnover of which as per its last profit and loss account does not exceed two crore rupees or
such higher amount as may be prescribed which shall not be more than twenty crore rupees:

Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act;