New Definition of Small Company India

Let’s Understand

The new definition of a small company has changed how many Indian businesses manage compliance. This update increases the eligibility limits and gives more companies the benefit of simpler compliance rules. In this blog, we explain the revised limits, the changes announced in 2025, and how to know if your business qualifies as a small company.

What Is the New Definition of Small Company in India?

The MCA has notified revised limits for small companies under Section 2(85). These changes aim to support more early stage and growing businesses with lower compliance pressure. As data seen in industry reports, many companies can reduce their annual burden by almost 40 percent once they fall under this category.

Revised Limits for Small Company (from 1 December 2025)   

Based on the official amendment and the updated chart:

These updated limits replace the older 2 crore and 20 crore thresholds that were introduced in 2021. The Government continues to widen the scope so that more companies can enjoy a lighter compliance framework.

Who Qualifies as a Small Company Now ?

A company qualifies as a small company when:

• Its paid up capital is 10 crore or less

• Its turnover is 100 crore or less as per the latest audited financial statements

• It is not a holding company or subsidiary company

• It is not registered under Section 8

• It is not a special class company notified by the Government

These rules are available on www.mca.gov.in and follow the definitions under Section 2(85).

How to Know if Your Company Falls Under the New Small Company Definition?

Many founders often guess their classification, which leads to errors in annual filings. The simple way is to check two numbers from your audited financials.

• Paid up capital

• Turnover for the last financial year

If both numbers fall within the revised limit, your company qualifies. This helps you shift to MGT 7A and fewer board meetings which saves time during the year.

We see many clients who misunderstand their classification. So at Ebizfiling, we often guide them with a quick evaluation and correct filing format to avoid penalties. As seen in recent compliance cases, wrong classification leads to incorrect annual returns.

How Ebizfiling Works for you?

• We review your paid up capital and turnover to confirm small company status

• We guide you on the exact forms you must file as per the MCA rules

• We prepare all documents including MGT 7A and financial statements

• We manage your annual filings and complete ROC submissions on time

• We keep your company compliant all year with reminders and guidance

Let’s sum up  

The updated definition of a small company gives Indian founders a clear advantage. The new limits help more businesses reduce compliance, cost, and penalties. If you want to confirm your eligibility, Ebizfiling can guide you with a quick evaluation and help you file the right forms under the small company rules.

Official MCA Gazette Notification    

You can  verify the update directly from the Government source, we have  also attached the official MCA notification GSR 880(E) below.

Click Below to download the Free MCA Gazette Notification 

MCA Gazette Notification on the New Definition of Small Company

FAQs on Small Company Compliance