MCA
Notification No. G.S.R. 92(E)
dtd: 01/02/2021
The Ministry of Corporate Affairs notified a new set of Rules, Companies (Specification of Definition Details) Amendment Rules, 2021 to amend the existing Companies (Specification of Definitions Details) Rules, 2014 (The Rules) vide notification no. G.S.R. 92(E) dated 1st February, 2021.
With this amendment, a new clause (t) was inserted in Rule 2(1), to provide for amendment in the definition of small company. The clause read as follows:
"(t) For the purpose of sub-clause (i) and sub-clause (ii) of clause (85) of section 2 of the Act, paid up capital and turnover of the small company shall not exceed rupees two crores and rupees twenty crores respectively."
The amended rules were set to come into force w.e.f. 1st April, 2021.
Further, provided below are the existing and amended definition to know the exact changes.
Existing Definition:-
Section 2(85): "small company’’ means a company, other than a public company,—
(i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than ten crore rupees; and
(ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than one hundred crore rupees:
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act;
Amended Definition:
"small company’’ means a company, other than a public company,—
(i) paid-up share capital of which does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than ten crore rupees; and
(ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed twenty crore rupees or such higher amount as may be prescribed which shall not be more than one hundred crore rupees:
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act;
Conclusion from the above: -
Particulars | Old Limit | New Limit |
Paid-up share Capital | 50 Lakhs | 2 Crores |
Turnover | 2 Crores | 20 Crores |
Further, the new limits are applicable from FY 2021-22 onwards and it will have no impact on filing which pertain to FY ended 31st March, 2021.
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