Companies with annual turnover up to Rs 100 crore will now be classified as small companies: Indian govt

The government has expanded the definition of small companies, allowing a larger group of businesses to benefit from lighter compliance rules and quicker merger approvals.

In a notification issued on December 1, the Ministry of Corporate Affairs said that companies with paid-up capital up to Rs 10 crore and annual turnover up to Rs 100 crore will now qualify as small companies. The previous limits were Rs 4 crore and Rs 40 crore.

The changes take effect immediately under the Companies (Specification of Definition Details) Amendment Rules, 2025.

Small companies receive several relaxations under the Companies Act. They are exempt from preparing cash flow statements and can file a simplified board report. They pay lower fees for annual filings and face reduced penalties for non-compliance. Mergers between small companies also move through a fast-track route.

Small companies are required to hold at least one Board meeting in each half of a calendar year, with a minimum gap of 90 days between the two meetings.