MCA Enhances Small Company Criteria: Capital ₹10 Crore, Turnover ₹100 Crore

On 1 December 2025, the Ministry of Corporate Affairs (MCA) issued a significant amendment to the Companies (Specification of Definition Details) Amendment Rules, 2025, in notification G.S.R. 880(E), redefining the criteria for “small companies.” Officially published in the Gazette of India, this amendment expands the scope of enterprises eligible for simplified compliance. By increasing the paid-up capital and turnover thresholds, the government aims to ease regulatory burdens for private companies, start-ups, and MSMEs, thereby promoting growth and formalisation in the business sector.

Eligibility Thresholds for Small Companies 

• The Companies (Specification of Definition Details) Rules, 2014 have been amended to substitute clause (t) of Rule 2(1).
• Paid-up capital limit for small companies increased from ₹4 crore → ₹10 crore.
•  Annual turnover limit raised from ₹40 crore → ₹100 crore.
• Companies previously exceeding old thresholds can now qualify as small companies.
• The amendment expands eligibility for businesses to avail simplified compliance and regulatory relaxations.
• These thresholds apply to sub-clauses (i )and (ii)of clause (25 ) under section of the Companies Act 2013

Expected Impact and Benefits of the Threshold Revision

 Reduced Compliance Burden:

•    Simplified financial reporting.
•    Fewer mandatory board meetings.
•    Exemptions from certain statutory filings.

   Encourages Growth and Formalisation:

•        A wider small-company classification enables operational scaling.
•       Start-ups and MSMEs can access investment and growth opportunities with fewer regulatory constraints.

 Alignment with Economic Reality:

•    Updated thresholds reflect current business conditions and inflation.
•    Ensures the Companies Act is practical, supportive, and business-friendly for emerging enterprises.

Conclusion

By increasing the paid-up capital limit to ₹10 crore and turnover to ₹100 crore, the MCA has made more companies eligible as small companies. This change eases compliance, supports start-ups, MSMEs, and private firms, and encourages growth, formalisation, and easier business operations in India.