MCA Revises the Definition of Small Companies to Facilitate Ease of Doing Business

Ministry of Corporate Affairs (“MCA”) vide Notification No. G.S.R. 700(E) dated 15^th September 2022 had amended Rule 2(1)(t) of Companies (Specification of definition details) Rules, 2014 and had further revised the definition of Small Companies.

Initially, the limit for small companies was paid up capital not exceeding rupees 50 lakh and turnover not exceeding rupees 2 crores. The definition was revised by increasing the threshold limit for paid Up Capital from Rupees 50 lakh to Rupees 2 crore and turnover from Rupees 2 crore to Rupees 20 crore vide Notification No. G.S.R. 92(E). dated 1^st February 2021 effective from 1^st April 2021. Now, the definition has been further revised by increasing such thresholds for paid-up Capital from Rupees 2 crore to Rupees 4 crore and turnover from Rupees 20 crore to Rupees 40 crore.

The changes effected by MCA in the definition of a Small Company can be summarized as follows:

The complete text of the Rules may be viewed at the below link: https://bit.ly/3E3l7w7

Additional Resources:

• CBDT Amendment Revises Form 16, Form 24Q, and Form 12BA
• Guidelines on withholding tax on payment of business benefits
• Iiac Releases Regulations for Conduct of Arbitration Involving Micro and Small Enterprise
• MCA establishes CSC for carrying out Scrutiny of STP E-Forms filed by companies.

Article contributed by Syed Arsalan Ahmed, Associate – Legal, MBG Corporate Services