Small Company New Definition Applicability : The Modi government is running many schemes regarding the small companies of the country. Under which the problems faced by these companies are resolved quickly. Many concessions are also given to these companies by the government. Let us tell you that the central government has made major changes in the rules related to capital and turnover of small companies.
ordinance issued by the ministry
The Union Ministry of Corporate Affairs has issued an ordinance, in which small companies have been redefined. Also, the scope of paid-up capital of small companies has been increased from a maximum of Rs 2 crore to Rs 4 crore now. Under the new rules, the ministry has increased the turnover limit of small companies, which was earlier maximum Rs 20 crore, to Rs 40 crore now.
this change happened
It is known that the Central Government has taken this step to promote Ease of Doing Business in the country. The Ministry of Corporate Affairs has implemented Company Law in the country. The Ministry has taken several measures in the near past for ease of doing business and ease of living. In these, various provisions of the Companies Act, 2013 and the Limited Liability Partnership Act, 2008 have been taken out of the purview of the crime.
What is Companies Act
Start-up India has decided to increase fast-track mergers, encourage corporatisation of Single Person Companies (OPCs). The definition of “small companies” under the Companies Act, 2013 was amended by increasing their limit of paid-up capital. In this context, the limit of paid-up capital was raised from “not exceeding Rs.50 lakh” to “not exceeding Rs.2 crore”.
what is the new definition
The turnover was changed from “not exceeding Rs.2 crore” to “not exceeding Rs.20 crore”. This definition has been further revised, according to which the limit of paid-up capital has been changed from “not exceeding Rs.2 crore” to “not exceeding Rs.4 crore” and turnover from “not exceeding Rs.20 crore” to “40 crores not exceeding Rs.
Now you will get these facilities
- There is no longer a need to prepare cash flow accounts as a part of financial accounting.
- It has not been necessary for the auditor of a small company to report on the appropriateness of internal financial controls and the operability of the financial controls in its report.
- The annual return of the company can be signed by the company secretary or in the absence of the company secretary, can be signed by the director of the company.
- Benefits of preparing and filing abridged annual return.
- Mandatory rotation of auditor is not required.
- Board meeting can be held only twice in a year.
- Lesser fines for smaller companies.
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