Small company threshold raised to ₹10 crore / ₹100 crore — who now qualifies, and what changes

Effective 1 December 2025, the Ministry of Corporate Affairs — by the Companies (Specification of Definition Details) Amendment Rules, 2025, notified as G.S.R. 880(E) — has raised the small-company thresholds under Section 2(85) of the Companies Act, 2013. A private company now qualifies as a small company where its paid-up share capital does not exceed ₹10 crore and its turnover as per the profit-and-loss account for the immediately preceding financial year does not exceed ₹100 crore.

The change pulls a substantial number of private companies — many of them mid-sized, well-established businesses — into a lighter compliance regime that had until now been designed for genuinely small entities. For companies at or near the earlier limits, the practical question is simple: what actually changes on the compliance calendar, and does that change take effect this financial year or the next?

Small-company status carries four visible reliefs. First, the annual return is filed on Form MGT-7A (a lighter form) rather than MGT-7. Second, the financial statements filed with the ROC need not include a cash-flow statement. Third, the requirement to hold four board meetings a year is reduced to two, provided there is a gap of not less than ninety days between them. Fourth, several rotation-of-auditor and internal-financial-controls provisions that apply to larger private companies do not apply to a small company.

The status is determined by looking backwards. A company that meets both thresholds as at the end of the immediately preceding financial year is a small company for the current year's filings. This means that a company crossing the ₹10 crore paid-up capital ceiling on 15 March of a given year has effectively opted itself out of small-company status for the annual filings that follow that year-end.

The status is also lost if the company is a holding or subsidiary company, a Section 8 company, or a company registered under a special Act. This has not changed with the threshold revision, and it is a common misreading — a private company sitting well within the ₹10 crore / ₹100 crore limits but held as a subsidiary of a larger group cannot claim small-company reliefs.

For boards that now qualify, three things are worth doing this year. First, confirm the status against the audited financial statements for the preceding financial year — the paid-up capital number is straightforward, the turnover figure needs to be read from the P&L on an audited (or, where audit is not yet complete, provisionally adjusted) basis. Second, adjust the board meeting calendar for the current financial year to reflect the two-meeting minimum, with the ninety-day gap on file. Third, confirm with the auditor that the financial statements to be filed with the ROC omit the cash-flow statement where the company has not been required to prepare one under Ind AS or another accounting requirement.

For boards that will lose the status the moment a fund-raise or a turnover milestone tips the numbers over the threshold, the compliance calendar should be built for the heavier regime from the start of the financial year in which the milestone is expected. Rebuilding the calendar mid-year is disruptive and often leaves gaps.