What is a Small Company

Small Company is a new form of private company under the Companies Act, 2013. Small company concept is recommended  by Dr. JJ Irani Committee to introduce in Companies Act, 2013. The fact behind the introduction of small company is

Why small companies should suffer from the consequences of regulation that may be designed for large companies and widely held companies. Small companies should get some relaxation in financial reporting and audit requirement

As per section 2(85) Small Company means a company other than a public company having-

• 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 five crore rupees.

                                                         or

• Turnover of which does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees.

Note: The definition of Small Company shall not applicable to -

• A holding company or a subsidiary company
• A company registered under section 8
• A company or body corporate governed by any special Act.