Which small-company limits are in force?
A small company is a company, other than a public company, whose paid-up share capital does not exceed ₹4 crore and whose turnover does not exceed ₹40 crore. Both limits apply. The Act allows a higher amount to be prescribed, up to ₹10 crore and ₹100 crore. That ceiling is not the test a company uses.
What is the test today?
The prescribed limits have stood at ₹4 crore and ₹40 crore since the notification of 15 September 2022. Turnover is the figure in the profit and loss account of the immediately preceding financial year. A company is outside the definition even inside those rupees if it is a public company, a holding company, a subsidiary, a section 8 company, or a company or body corporate governed by a special Act. Filing the annual return does not create the status.
The Companies Amendment Bill 2026 proposes to raise the ceiling in section 2(85), the most that may be prescribed. The Bill is not law. A figure of ₹10 crore or ₹100 crore describes that ceiling. It does not replace the ₹4 crore and ₹40 crore test.
What were the earlier tests?
| From | Paid-up capital | Turnover |
|---|---|---|
| 1 April 2014 | ₹50 lakh | ₹2 crore |
| 1 April 2021 | ₹2 crore | ₹20 crore |
| 15 September 2022 | ₹4 crore | ₹40 crore |
What changed for director KYC?
A separate 2025 amendment, in force on 31 March 2026, replaced the annual KYC date. Every individual who holds a DIN on 31 March of a financial year files Form DIR-3 KYC Web by 30 June of every third consecutive financial year. A change in personal mobile number, email address, or residential address is filed in that form within 30 days. The detail is on the KYC page. Other rule changes from 2025, including the board’s report, are on the accounts-rules page.
Frequently asked questions
Four questions cover the ceiling, one limit on its own, the 2026 Bill, and director KYC.
Is the test now ₹10 crore and ₹100 crore?
No. Those figures are the most the Act allows the government to prescribe. The prescribed limits in force are ₹4 crore of paid-up capital and ₹40 crore of turnover.
Does meeting one limit make the company small?
No. Paid-up capital and turnover both have to be within the limits. Turnover is the preceding year’s profit and loss account.
Is the 2026 Bill in force?
No. The Companies Amendment Bill 2026 proposes to raise the ceiling in section 2(85). A proposal is not the test.
Is director KYC still due every September?
No. From 31 March 2026 the intimation is Form DIR-3 KYC Web, by 30 June of every third consecutive financial year.
Sources
A small company is section 2(85) of the Companies Act, 2013. The prescribed limits are those notified on 15 September 2022. Director KYC is rule 12A as substituted from 31 March 2026.