India Raises Small Company Thresholds to ₹10 Crore Capital and ₹100 Crore Turnover

Effective December 1, 2025, the Ministry of Corporate Affairs (MCA) has revised the definition of a “small company” in India.  

The updated thresholds will provide regulatory relief to thousands of firms and align financial norms with the expanding size of newer enterprises. 

Revised Definition of Small Company Under Companies Act 

As per the Companies (Specification of Definition Details) Amendment Rules, 2025, a company will now be categorised as a “small company” if it meets both of the following conditions: paid-up share capital is less than or equal to ₹10 crore, and turnover is less than or equal to ₹100 crore.  

These limits have more than doubled from the earlier thresholds of ₹4 crore in paid-up capital and ₹40 crore in turnover. 

This amendment came into effect immediately through G.S.R. 880(E) notification published in the Official Gazette on December 1, 2025. The updated limits substitute Rule 2(1)(t) and are applicable under Section 2(85) of the Companies Act, 2013. 

Benefits for Businesses and MSMEs 

The updated definition will benefit numerous firms across sectors such as technology, professional services, manufacturing, and startups.  

Qualifying companies can now avail themselves of key relaxations including exemption from mandatory internal audit, fewer board meetings, simplified reporting, and fast-track mergers. 

This move particularly aids the MSME sector by reducing compliance costs and offering a more supportive regulatory environment for business expansion. 

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Continuity with India’s Ease of Doing Business Strategy 

This update continues India’s momentum to reduce corporate compliance friction. Complemented by digital governance tools such as the MCA V3 portal and VSeID, these reforms collectively aim to make regulatory interactions simpler and more web-enabled for companies. 

The V3 portal, introduced on July 14, 2025, supports auto-filled returns, improved validation, and quicker processing, making statutory adherence less time-consuming. 

Conclusion 

The revision of the “small company” thresholds to ₹10 crore capital and ₹100 crore turnover brings more businesses under a lighter compliance regime. This reform supports expanding enterprises and aligns regulations with modern business scales in India. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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