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Small company definition
If a private company's turnover of sales in fy 13 14 is less than 2 CR and it crosses 2CR only during fy 14 15 then what will be the status of such company in fy 14 15? Small company or normal private limited company?
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To be classified as a ‘small company’, a 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.
- Definition has been amended vide The Companies (Removal Of Difficulties) Order 2015, dated 13.02.2015.
Earlier the requirement was to fulfill either one of the two conditions.
In the given instance, the company is fulfilling the turnover condition. If the paid up capital does not exceed Rs. 50 lakh, then it can be classified as a ‘small company’ for 2014-15.
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