MCA Raises Small Company Thresholds: Paid-Up Capital Rs 10 Crore, Turnover Rs 100 Crore



Quick Summary
The Ministry of Corporate Affairs (MCA) has significantly increased the financial thresholds for a company to be classified as 'small'. The paid-up capital limit has been raised to Rs 10 crore, and the turnover limit to Rs 100 crore. These changes aim to reduce compliance burdens for a larger number of businesses, particularly startups and MSMEs, thereby promoting ease of doing business in India.

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 promoting ease of doing business for India's growing startup and MSME ecosystem. According to the notification G.S.R. 880(E) issued on December 1, 2025, the amended rules come into effect immediately upon
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FAQ :

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.

Attached File : 671907_25867_268124.pdf



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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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