MCA Expands Small Company Definition: Higher Capital and Turnover Limits Announced

Inside the announcement  
According to LiveLaw, Business Today, and TaxGuru, the MCA notified amendments to the Companies (Specification of Definition Details) Rules, 2014, through G.S.R. 880 (E). The updated criteria expand the scope of small companies, allowing more private firms to benefit from reduced compliance requirements. These include exemptions from preparing cash flow statements, fewer board meetings, and simplified filing processes. The change is expected to significantly support India’s startup ecosystem and MSMEs by lowering regulatory costs and encouraging growth.  

Notable updates  
• Paid-up capital ceiling raised from Rs 4 crore to Rs 10 crore  
• Turnover limit increased from Rs 40 crore to Rs 100 crore  
• Applies only to private companies not classified as holding, subsidiary, Section 8, or special Act companies  
• Compliance relaxations include exemption from cash flow statements and only two board meetings annually  
• Effective immediately from December 1, 2025  

Major takeaway  
By redefining small company criteria, MCA has widened the compliance relief net, empowering more startups and MSMEs to focus on growth rather than regulatory burdens. This reform strengthens India’s business landscape and aligns with the government’s push for ease of doing business.  

Sources: LiveLaw, Business Today, TaxGuru