Key Changes
- The Ministry of Corporate Affairs has notified the Companies (Specification of Definition Details) Amendment Rules, 2025 (G.S.R. 880(E), dated 1 December 2025).
- The amendment updates Rule 2(1)(t) of the 2014 Rules.
- As per the revised clause:
- Paid-up capital of a Small Company shall not exceed ₹10 crore.
- Turnover of a Small Company shall not exceed ₹100 crore.
- These rules come into force from the date of publication in the Official Gazette.
Impact for MSMEs
- More MSMEs now fall within the Small Company category under Section 2(85) of the Companies Act, 2013.
- Entities qualifying as Small Companies can access the simplified compliance framework prescribed for them, which includes:
- Lesser statutory burdens under the Act.
- Applicability of lower penalties where provided under the law.
- Reduced reporting requirements and simplified financial-statement formats.
- MSMEs can grow up to the revised limits without moving into a higher-compliance category.