What is Small Company

Small Company

Small Company means a company other than a public company it means the small company cannot become a public company. a small company that fulfills two criteria one is their paid-up share capital should not be more than 50 lakh but this limit is as per the Act. and Act is giving power to the central government and the central government wants the change this figure they can increase this figure up to 10 crore and they have exercised this power and they have increased 4 crore which is up to 14 crore. paid-up share capital is one condition and another condition is turnover.

According to Act the turnover limit should not be more than 2 crores but Act is giving power to the central government if the central government wants to increase this turnover limit up to 100 crores. the central government can exercise this power and then can have increased this limit up to 40 crores.

There are four companies that will not be considered as a small company.

1. Public Company
2. Holding Company and Subsidiary Company
3. Section 8 Company
4. Statutory Company

The above four companies even if these fulfill both criteria and if these paid-up share capital within 4 crores and turnover limit within 40 crores but these above four companies will not be considered as a small company.