Company law and LLP · Annual filings and ROC
What is a small company under the Companies Act, and what relaxations does it get?
Short answer
Since 1 December 2025, a small company is a private company with paid-up capital up to ₹10 crore and turnover up to ₹100 crore. Holding and subsidiary companies, Section 8 companies and companies under special Acts are excluded. Small companies need only two board meetings a year, file a shorter annual return, skip the cash flow statement and CARO, have no auditor rotation, and pay half the penalties.
The definition
A private company (not a public company) is a small company if:
| Test | Limit since 1 December 2025 | Earlier limit |
|---|---|---|
| Paid-up share capital | Up to ₹10 crore | ₹4 crore |
| Turnover (as per the last profit and loss account) | Up to ₹100 crore | ₹40 crore |
Both tests must be met. Excluded regardless of size: a holding or subsidiary company, a company registered under Section 8, and a company governed by a special Act.
Many companies that were not small before December 2025 now qualify. Check your status each year against the latest audited figures.
Relaxations
| Area | Relaxation |
|---|---|
| Financial statements | No cash flow statement |
| Annual return | Shorter MGT-7A; can be signed by one director |
| Board meetings | Two a year, one in each half of the calendar year, at least 90 days apart |
| Auditor | No rotation; no CARO 2020; no report on internal financial controls |
| Shares | Dematerialisation of securities not compulsory |
| Mergers | Fast-track merger with another small company or a holding company |
| Penalties | Half the normal penalty for many defaults (section 446B) |
| Board's report | Shorter content |
What does not change
A small company still needs a statutory audit, an AGM, the filing of AOC-4 and MGT-7A, and compliance with the Secretarial Standards on board and general meetings.
Legal basis
- Section 2(85), Companies Act, 2013
- Companies (Specification of Definitions Details) Amendment Rules, 2025 (effective 1 December 2025)
Official sources
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