Companies Act, 2013--Small Company

Revised Definition of Small Company--Analysis and its Impact

CA. Deepak Harwani

In the present article the learned author discusses about the latest Amendment rules brought by Ministry of Corporate Affairs (MCA), altering the definition of the Small Company, by increasing threshold limits for the eligibility and along with fewer relaxations provided to them in order to make compliance mechanism more flexible and promote ease of doing business.

1. Introduction

The Ministry of Corporate Affairs (MCA) in order to promote ease of doing business has issued a notification introducing the Companies (Specification of Definitions Details) Amendment Rules, 2025 which came into effect immediately from 1 December 2025. The amendment has been introduced in order to increase the financial thresholds which are used to decide when a private company can be classified as a 'small company' as per section 2(85) of the Companies Act, 2013.