What is Small Company under Companies Act, 2013?

Question

What is Small Company under Companies Act, 2013?

in progress 0
Donna 1 year 1 Answer 379 views Silver 0

Answer ( 1 )

  1. Companies Act, 2013 was a major change in corporate law after Companies Act, 1956. This act introduced many new terms. Small company is one of such.

    According to definition given in Section 2(85)

    ‘‘small company’’ means a company, other than a public company,—

    (i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore rupees; or

    (ii) turnover of which as per its last profit and loss account does not

    exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees:

    Provided that nothing in this clause shall apply to—

    (A) a holding company or a subsidiary company;

    (B) a company registered under section 8; or

    (C) a company or body corporate governed by any special Act;

    This means Company other than Public Company whose either paid up capital does not exceed fifty lakh rupees or turnover does not exceed two crore rupees. However Central Government can raise the paid up capital limit to five crore and turnover limit upto 20 crore. At the same this clause is not applicable to certain class as prescribed above.

    The obvious question why this classification ? Yes ,there is logic. Exemption in holding of Board meetings, signing of annual returns etc are there.

Leave an answer

Sorry, you do not have a permission to answer to this question .