Revision in the definition of small company
The ministry of corporate affairs (MCA) has amended definition of “small company” wide notification no G.S.R. 700(E). dated 15th September 2022. The revised paid-up capital and turnover thresholds for small companies that will be applicable w.e.f. 15th September 2022.
Now onwards, companies having paid capital upto Rs 4 Cr & turnover upto Rs 40 Cr will be considered as Small Companies. Earlier limit was Rs 2Cr & 20Cr respectively.
Small companies enjoy certain exemptions such as
-small companies not required to prepare cash flow statements,
-small companies can prepare annual report in abridged form
-only 2 board meetings needs to conduct in a calendar year
-various E-forms can be signed by the directors only
-reduced penalties under the Company Act 2013
-Auditors not require to report on internal control over financial reporting etc.