In line with the vision of the Government of India, the definition under the Companies Act, 2013 for Small Companies has been revised w.e.f 1st April 2025. An enterprise shall be classified as small enterprise on the basis of where the investment in plant and machinery or equipment does not exceed Rs 25 crore and turnover does not exceed Rs 100 crore. Definition of Small Company has been amended by increasing the threshold limit of a small company from having a paid-up capital not exceeding Rs.2.00 Crore to Rs.4.00 Crore and turnover not exceeding Rs.20.00 Crore to Rs.40.00 Crore. Similarly, concept of small LLP has been introduced which is subject to lesser compliances, lesser fee to reduce the cost of compliances. (Click Here for Notification). Small companies are the backbone of our corporate world. They represent the Entrepreneurial aspirations & Innovation capabilities of lakhs of citizens. They contribute to employment and GDP in a very substantial manner. The Government has always been committed to taking measures which create a more conducive business environment for such law abiding companies, including reduction of compliance burden on such companies. Some of the benefits of reduction in compliance burden for over 2 lakh companies as a direct consequence of the revised definition are as under: No need to prepare Cash flow statement as part of financial statement. Where other companies require providing details of remuneration to directors and key managerial personnel, small companies are required to provide details of the only aggregate amount of remuneration drawn by directors in its Annual Return. Mandatory rotation of auditor not required. An Auditor of small companies is not required to report on the adequacy of the internal financial controls and its operating effectiveness in the auditor’s report. Hold only two board meetings in a year. Annual Return of the company can be signed by the Company Secretary, or where there is no company secretary, by a single director of the company. Lesser penalties for Small Companies. Lesser filing fees for Small Companies. Source : PIB