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The Ministry of Corporate Affairs (MCA) has notified the Companies (Specification of Definition Details) Amendment Rules, 2025, introducing a major relaxation in the financial thresholds for classifying a company as a small company. The revised norms are aimed at reducing compliance burden and promo
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The new thresholds for a small company are a paid-up capital of Rs 10 crore and a turnover of Rs 100 crore.
The amended rules come into effect immediately upon publication in the Official Gazette, as notified on December 1, 2025.
The main objective is to reduce the compliance burden and promote ease of doing business for India's growing startup and MSME ecosystem.
The amendment substitutes clause (t) of Rule 2(1) of the Companies (Specification of Definition Details) Rules, 2014.
The enhancement is expected to bring thousands of additional companies into the 'small company' category, reduce compliance costs, and encourage entrepreneurship by simplifying statutory obligations.
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