New Definition of Small Companies as per Companies Act MCA with CA Himanshu Kumar

Thu, 11 Feb 2021 10:40:13 +0000

Government of India, the definition under the Companies Act, 2013 for Small
Companies has now been revised by increasing their thresholds for Paid up capital
from “not exceeding Rs 50 lakh” to “not exceeding Rs 2 crore” & Turnover from “not
exceeding Rs 2 crore” to “not exceeding Rs 20 crore”
Benefit for more than 2 Lacs Companies :

 No need to prepare Cash flow statement as part of financial statement.
 Where other companies require providing details of remuneration to directors
and key managerial personnel, small companies are required to provide
details of the only aggregate amount of remuneration drawn by directors in its
Annual Return.
 Mandatory rotation of auditor not required.
 An Auditor of small companies is not required to report on the adequacy of the
internal financial controls and its operating effectiveness in the auditor’s
report.
 Hold only two board meetings in a year.
 Annual Return of the company can be signed by the Company Secretary, or
where there is no company secretary, by a single director of the company.
 Lesser penalties for Small Companies.
 Lesser filing fees for Small Companies.

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