Small company definition: limits and benefits from December 2025
A small company is a private company with paid-up capital up to ₹10 crore and turnover up to ₹100 crore, after G.S.R. 880(E) dated 1 December 2025.
Short answer
A small company is a private company whose paid-up capital does not exceed ₹10 crore and whose turnover does not exceed ₹100 crore, under section 2(85) of the Companies Act, 2013 as amended by G.S.R. 880(E) dated 1 December 2025. Small companies enjoy lighter compliance, such as fewer board meetings, an abridged annual return and no cash flow statement.
- Paid-up capital
- Up to ₹10 crore
- Turnover
- Up to ₹100 crore
- Notified by
- G.S.R. 880(E), 1 December 2025
- Earlier limits
- ₹4 crore and ₹40 crore
Who qualifies and who does not
Both conditions must be met, based on the latest audited financial statements. Before December 2025, the limits were ₹4 crore of paid-up capital and ₹40 crore of turnover, so many more growing startups now qualify. Certain companies are excluded even if they are within the limits.
- Public companies
- Holding companies and subsidiary companies
- Section 8 companies
- Companies governed by a special Act
Benefits of small company status
Small companies need to hold only one board meeting in each half of the calendar year with a gap of at least 90 days between them, instead of four meetings a year. Their financial statements need not include a cash flow statement, they file the shorter annual return in Form MGT-7A, and auditor rotation does not apply. Penalties for many defaults are capped at half the normal amount under section 446B. Small companies were also excluded from the mandatory dematerialisation of securities under the 2023 rules for private companies.
Why it matters for startups
Because the subsidiary exclusion applies, an Indian subsidiary of a foreign company cannot be a small company, however small it is. Founders should also watch the thresholds year by year: crossing ₹10 crore of paid-up capital after a large round, or ₹100 crore of turnover, ends the status and brings in fuller compliance from the following year.
Related services
Sources
- Ministry of Corporate Affairs (MCA) portal
- TaxGuru: 25 major tax, GST and company law reforms of 2025
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
What are the current small company limits?
Paid-up capital up to ₹10 crore and turnover up to ₹100 crore, as revised by G.S.R. 880(E) dated 1 December 2025.
Is an OPC a small company?
An OPC is a private company and can meet the small company test, but it also has its own separate relaxations under the Act.
Can a startup subsidiary be a small company?
No. Holding and subsidiary companies are excluded from the definition, even if they are within the financial limits.