MCA Redefines Small Company Criteria, Raises Paid Up Capital Cap To Rs 10 Crore and Turnover Cap To Rs 100 Crore

The Ministry of Corporate Affairs has revised the definition of small companies by increasing the turnover ceiling from Rs 40 crore to Rs 100 crore and the paid-up capital threshold from Rs 4 crore to Rs 10 crore.

The notification was issued on December 1, 2025 which took effect immediately. 

The amendment updates the Companies (Specification of Definition Details) Rules, 2014. These rules were first notified in March 2014 and last revised in September 2022.

Only private companies that are not holding companies, subsidiaries, Section 8 (non-profit organization) companies or companies governed by special Acts can be treated as small companies. Such companies receive certain compliance relaxations.

These include the need for only two board meetings in a year and an exemption from preparing cash flow statements.

Companies that now fall within the new thresholds must review their compliance position for the financial year 2025–26.