MCA Notifies Revised Thresholds for Classification of Small Companies
Introduction
The Ministry of Corporate Affairs (“MCA”) has issued the Companies (Specification of Definition Details) Amendment Rules, 2025, through a notification dated 1 December 2025. These rules amend the Companies (Specification of Definition Details) Rules, 2014 and take effect from the date of their publication in the Official Gazette.
Amendments
The amendment substitutes clause (t) of Rule 2(1) of the 2014 Rules. Under the revised provision, a company shall qualify as a “small company” for the purposes of Section 2(85)(i) and (ii) of the Companies Act, 2013 if:
- Its paid-up share capital does not exceed ten crore rupees, and
- Its turnover does not exceed one hundred crore rupees.
This revision represents the highest threshold limit prescribed to date, thereby expanding eligibility for small company classification more significantly than ever before.
Earlier Thresholds (2022 Amendment)
Before the 2025 amendment, the limits were last revised on 15 September 2022, where:
- The paid-up capital limit was ₹4 crore, and
- The turnover limit was ₹40 crore.
The 2025 enhancement thus marks a substantial upward revision from the 2022 framework, increasing the scope of entities that fall within the small company category.
Conclusion
The revised thresholds underscore the Government’s continued commitment to simplifying the corporate compliance landscape and facilitating ease of doing business. By notifying the highest limits introduced so far for the classification of small companies, the MCA aims to extend statutory relaxations, such as reduced compliance requirements, simplified reporting, and lower penalties, to a wider base of corporate entities.
This amendment is part of the broader regulatory reforms aimed at supporting growth, innovation, and operational flexibility within India’s corporate ecosystem.