India raises the 'small company' thresholds to ₹10 crore capital and ₹100 crore turnover
From 1 December 2025, an Indian private company counts as a 'small company' if its paid-up capital is no more than ₹10 crore and its turnover no more than ₹100 crore, up from ₹4 crore and ₹40 crore. Small companies get lighter compliance, including two board meetings a year, lower penalties, the fast-track merger route, and exemption from compulsory dematerialisation.
The Ministry of Corporate Affairs (MCA) issued the Companies (Specification of Definition Details) Amendment Rules, 2025 on 1 December 2025, amending rule 2(1)(t) of the 2014 rules that set the limits for a 'small company' under section 2(85) of the Companies Act, 2013.
What changed
- Paid-up share capital limit: ₹10 crore (was ₹4 crore).
- Turnover limit: ₹100 crore (was ₹40 crore).
- Both limits must be met.
- The other conditions are unchanged: public companies, holding and subsidiary companies, section 8 companies and companies under special Acts cannot be small companies.
Why it matters
Small companies benefit from lighter rules, including only two board meetings a year, generally halved penalties for certain defaults, access to the fast-track merger route, and exemption from compulsory dematerialisation of shares.
Who is affected
Indian private companies that now fall under the higher limits, and the company secretaries managing their compliance calendars.
Later developments
The Corporate Laws (Amendment) Bill 2026 proposes doubling the limits again, to ₹20 crore and ₹200 crore.