Ministry of Corporate Affairs has brought in an amended definition of small company under the Companies Act, 2013.
Hitherto small company was a company which had a paid up share capital of upto Rs.50 lakhs or turnover of Rs.2 crores.
Now by the amendment, the “or” has been substituted with “and” so that a small company will now be a company which satisfies both clauses i.e. paid up share capital of upto Rs.50 lakhs and turnover of upto Rs.2 crores. Confusing!!
I frankly do not understand why they have brought in a definition of small company because the benefits of small company are only the following – (1) sec 2(40) they need not include cash flow statement (2) sec 92 annual return to be signed by a company secretary and if there is no company secretary by a director, which is a confusing section because the threshold limits for appointment of full time company secretary are above the small company limits. and (3) sec 173 they can hold only one Board meeting in each half of a calendar year.