The Ministry of Corporate Affairs (MCA) has amended the definition of “small companies” under the Companies Act, 2013 wherein the Companies with paid up capital limit of 4 crores and turnover limit of upto 40 Crores would be treated as “small companies.”
A notification issued by the Ministry on Thursday said that “In the Companies (Specification of definition details) Rules, 2014, in rule 2, in sub-rule (1), for clause (t), the following clause shall be substituted, namely:- “(t) For the purposes of sub-clause (i) and sub-clause (ii) of clause (85) of section 2 of the Act, paid up capital and turnover of the small company shall not exceed rupees four crore and rupees forty crore respectively.”.”
The Ministry has taken several measures in the recent past towards ease of doing business and ease of living for the corporates. These included decriminalization of various provisions of the Companies Act, 2013 & the LLP Act, 2008, extending fast track mergers to start ups, incentivizing incorporation of One Person Companies (OPCs) etc.
Earlier, definition of “small companies” under the Companies Act, 2013 was revised by increasing their thresholds for paid up capital from “not exceeding Rs 50 lakh” to “not exceeding Rs 2 crore” and turnover from “not exceeding Rs 2 crore” to “not exceeding Rs 20 crore”.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
