{"id":50275,"date":"2026-11-10T12:31:17","date_gmt":"2026-11-10T07:01:17","guid":{"rendered":"https:\/\/www.kanakkupillai.com\/learn\/?p=50275"},"modified":"2026-11-10T12:31:46","modified_gmt":"2026-11-10T07:01:46","slug":"small-company-threshold-doubling-under-corporate-laws-bill","status":"publish","type":"post","link":"https:\/\/www.kanakkupillai.com\/learn\/small-company-threshold-doubling-under-corporate-laws-bill\/","title":{"rendered":"Small Company Threshold Doubling Under Corporate Laws Bill 2026: Will Your Pvt Ltd Qualify?"},"content":{"rendered":"<p>A proposed amendment in the Corporate Laws (Amendment) Bill, 2026 suggests doubling the statutory ceiling for a \u201csmall company\u201d from \u20b910 crore paid-up share capital and \u20b9100 crore turnover to \u20b920 crore and \u20b9200 crore, respectively. However, that would not automatically qualify every Pvt Ltd with lower paid-up capital or turnover as a small company, because the operative limits will be defined by MCA rules under the higher ceiling. This blog covers what the Bill proposes, what applies today, and what you should do now.<\/p>\n<p>Want to know where your company stands today? See our guide to the <a href=\"https:\/\/www.kanakkupillai.com\/annual-compliance-of-a-private-limited-company\">annual compliance of a private limited company<\/a>.<\/p>\n<div class=\"kp-quick-summary\">\n<p class=\"kp-quick-summary__title\">Quick Summary<\/p>\n<p>The Corporate Laws (Amendment) Bill, 2026 proposes doubling the maximum statutory limits for classifying a company as a small company in India. If implemented through the required legal and regulatory changes, the proposal could allow more businesses to access simplified corporate compliance benefits. However, the Bill is not yet law, so companies must continue following the existing applicable thresholds.<\/p>\n<ul class=\"kp-quick-summary__list\">\n<li><strong>Proposed Paid-Up Capital Limit:<\/strong> The Bill proposes increasing the maximum statutory ceiling from \u20b910 crore to \u20b920 crore.<\/li>\n<li><strong>Proposed Turnover Limit:<\/strong> The maximum statutory ceiling is proposed to increase from \u20b9100 crore to \u20b9200 crore.<\/li>\n<li><strong>MCA Rules:<\/strong> These are the maximum limits permitted under the proposal. The Ministry of Corporate Affairs (MCA) must prescribe the operative thresholds through rules.<\/li>\n<li><strong>Current Thresholds:<\/strong> The existing operative limits are \u20b910 crore in paid-up capital and \u20b9100 crore in turnover, effective from 1 December 2025. Before that, the limits were \u20b94 crore and \u20b940 crore.<\/li>\n<li><strong>Excluded Companies:<\/strong> Public companies, holding companies, subsidiary companies, Section 8 companies and companies governed by special Acts are excluded from small-company classification.<\/li>\n<li><strong>Compliance Benefits:<\/strong> Eligible small companies may benefit from simplified annual returns through Form MGT-7A, fewer board meetings, exemption from preparing a cash-flow statement, lighter auditor reporting requirements and reduced penalties.<\/li>\n<li><strong>Current Legal Position:<\/strong> The Corporate Laws (Amendment) Bill, 2026 is still a proposal and has not become law. Businesses must continue complying with the existing thresholds until the changes are formally enacted and notified.<\/li>\n<\/ul>\n<p class=\"kp-quick-summary__cta-text\"><strong>Need help understanding small-company eligibility and MCA compliance requirements?<\/strong><br \/>\nGet professional assistance with Private Limited Company compliance, annual filings and regulatory updates to keep your business legally compliant.<\/p>\n<p><a class=\"kp-quick-summary__button\" href=\"https:\/\/www.kanakkupillai.com\/annual-compliance-of-a-private-limited-company\">Get Expert Company Compliance Assistance<\/a><\/p>\n<\/div>\n<h2>What Is a Small Company Under the Companies Act?<\/h2>\n<p>\u201cSmall company\u201d is a concept defined under Section 2(85) of the Companies Act, 2013. It is applicable only to a private company that fulfils certain paid-up capital and turnover criteria and is not covered by an exclusion. Both tests must be met. Paid-up share capital is measured as at the last balance sheet date, and turnover is taken from the profit and loss account of the immediately preceding financial year.<\/p>\n<p>Such companies are entitled to relaxed compliance, such as filing a less detailed annual return form, holding fewer board meetings and not preparing a cash flow statement.<\/p>\n<p>Some of the exclusions are as follows:<\/p>\n<ul>\n<li>Public companies<\/li>\n<li>Holding and subsidiary companies<\/li>\n<li>Section 8 companies<\/li>\n<li>Companies or bodies corporate governed by any special Act<\/li>\n<\/ul>\n<h2>What the Corporate Laws Bill 2026 Proposes<\/h2>\n<p>The Corporate Laws (Amendment) Bill, 2026 was introduced in the Lok Sabha on 23 March 2026 and referred to a Joint Parliamentary Committee. The Committee presented its report on 3 August 2026, backing the Bill with changes. As of 2 November 2026, the <a href=\"https:\/\/prsindia.org\/billtrack\/the-corporate-laws-amendment-bill-2026\">PRS tracker<\/a> shows no passage, so the Bill is not yet law. The final text may differ from the version introduced.<\/p>\n<p>In the case of small companies, the Bill proposes to raise the statutory cap in Section 2(85):<\/p>\n<table width=\"650\">\n<thead>\n<tr>\n<td width=\"213\"><strong>Parameter<\/strong><\/td>\n<td width=\"213\"><strong>Current Statutory Ceiling<\/strong><\/td>\n<td width=\"223\"><strong>Proposed Statutory Ceiling<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td width=\"213\">Paid-up share capital<\/td>\n<td width=\"213\">\u20b910 crore<\/td>\n<td width=\"223\">\u20b920 crore<\/td>\n<\/tr>\n<tr>\n<td width=\"213\">Turnover<\/td>\n<td width=\"213\">\u20b9100 crore<\/td>\n<td width=\"223\">\u20b9200 crore<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>This doubles the maximum limit that Parliament allows MCA to fix under this section. It should be understood that this is the maximum limit and not the actual eligibility limit on the date the Bill is enacted.<\/p>\n<p>Want to know whether your Pvt Ltd will qualify under the proposed rules? Get an eligibility check from Kanakkupillai through our <a href=\"https:\/\/www.kanakkupillai.com\/annual-compliance-of-a-private-limited-company\">annual compliance<\/a> service.<\/p>\n<h2>Current Small Company Thresholds in India<\/h2>\n<p>Under the present MCA rules, a company is a small company if:<\/p>\n<ul>\n<li>Its paid-up share capital is not more than \u20b910 crore; and<\/li>\n<li>Its turnover for the previous year, as per the profit and loss account, does not exceed \u20b9100 crore.<\/li>\n<\/ul>\n<p>The government raised the thresholds from \u20b94 crore and \u20b940 crore to \u20b910 crore and \u20b9100 crore with effect from 1 December 2025 (G.S.R. 880(E)). The \u20b94 crore and \u20b940 crore limits had applied since September 2022.<\/p>\n<table width=\"650\">\n<thead>\n<tr>\n<td width=\"213\"><strong>Period<\/strong><\/td>\n<td width=\"213\"><strong>Paid-up Capital<\/strong><\/td>\n<td width=\"223\"><strong>Turnover<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td width=\"213\">September 2022 to November 2025<\/td>\n<td width=\"213\">Up to \u20b94 crore<\/td>\n<td width=\"223\">Up to \u20b940 crore<\/td>\n<\/tr>\n<tr>\n<td width=\"213\">From 1 December 2025 (current)<\/td>\n<td width=\"213\">Up to \u20b910 crore<\/td>\n<td width=\"223\">Up to \u20b9100 crore<\/td>\n<\/tr>\n<tr>\n<td width=\"213\">Proposed ceiling under the Bill<\/td>\n<td width=\"213\">Up to \u20b920 crore (if prescribed)<\/td>\n<td width=\"223\">Up to \u20b9200 crore (if prescribed)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The December 2025 notification used up all the room the Act allows, because the existing ceiling was \u20b910 crore and \u20b9100 crore. So MCA cannot go higher unless Parliament raises the ceiling, which is what the Bill proposes. Thus, the Bill provides room for future increases through rules. It does not change today\u2019s effective thresholds.<\/p>\n<h3>Point to Remember: \u201cAnd\u201d vs \u201cOr\u201d<\/h3>\n<p>In the present system, a company needs to satisfy the limit prescribed for both paid-up capital and turnover. The new Bill increases the maximum limit that could be prescribed for both parameters. Only paid-up share capital counts, not authorised capital. Securities premium is also generally not part of paid-up share capital, which matters for startups that raise money at a premium.<\/p>\n<h2>Will Your Private Limited Qualify After the Bill?<\/h2>\n<p>Your Private Limited will be able to qualify as a small company if and only if:<\/p>\n<ul>\n<li>It is a private limited company and not a public company.<\/li>\n<li>It is neither a holding company nor a subsidiary company.<\/li>\n<li>It is not a Section 8 company.<\/li>\n<li>It is not a company governed by a special Act.<\/li>\n<li>Its paid-up share capital falls within the limits prescribed by MCA.<\/li>\n<li>Its turnover during the immediately preceding year falls within the limits prescribed by MCA.<\/li>\n<\/ul>\n<h2>Practical Examples<\/h2>\n<table width=\"650\">\n<thead>\n<tr>\n<td width=\"287\"><strong>Company Profile<\/strong><\/td>\n<td width=\"363\"><strong>Likely Position After Final Rules<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td width=\"287\">Pvt Ltd with \u20b98 crore paid-up capital and \u20b990 crore turnover<\/td>\n<td width=\"363\">Qualifies under the current \u20b910 crore and \u20b9100 crore limits.<\/td>\n<\/tr>\n<tr>\n<td width=\"287\">Pvt Ltd with \u20b915 crore paid-up capital and \u20b9150 crore turnover<\/td>\n<td width=\"363\">May qualify only if MCA prescribes limits above the current levels, up to the proposed \u20b920 crore and \u20b9200 crore ceiling.<\/td>\n<\/tr>\n<tr>\n<td width=\"287\">Pvt Ltd with \u20b918 crore capital but \u20b9250 crore turnover<\/td>\n<td width=\"363\">Will not qualify even at the full proposed ceiling, since turnover exceeds \u20b9200 crore.<\/td>\n<\/tr>\n<tr>\n<td width=\"287\">Subsidiary of a listed company with \u20b95 crore capital and \u20b930 crore turnover<\/td>\n<td width=\"363\">Does not qualify, because holding and subsidiary companies are excluded.<\/td>\n<\/tr>\n<tr>\n<td width=\"287\">Pvt Ltd with \u20b96 crore paid-up capital and \u20b970 crore turnover<\/td>\n<td width=\"363\">Qualifies today, though it would not have qualified before December 2025.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2>Companies That Cannot Qualify as Small Companies<\/h2>\n<p>Even if a company fulfils the financial tests, the firms below cannot be considered small companies:<\/p>\n<ul>\n<li>Public limited companies, since the criteria are applicable only to private companies.<\/li>\n<li>Holding companies and subsidiary companies, irrespective of their size.<\/li>\n<li>Section 8 companies, such as not-for-profit companies.<\/li>\n<li>Companies incorporated under any other special Act, such as statutory companies in certain sectors.<\/li>\n<\/ul>\n<p>This is one of the most neglected points on many online pages. Founders think that low capital and turnover alone make the company eligible, but the statute adds these restrictions.<\/p>\n<h2>Compliance Benefits of Small-Company Status<\/h2>\n<p>Small-company status can lessen the compliance burden for eligible private companies. Some of the common advantages include:<\/p>\n<ul>\n<li><strong>No cash flow statement:<\/strong> it is not required as part of the financial statements.<\/li>\n<li><strong>Fewer board meetings:<\/strong> two board meetings a year, one in each half of the calendar year with a gap of at least 90 days, instead of the regular four.<\/li>\n<li><strong>Simple annual return:<\/strong> Form MGT-7A with fewer disclosures, and no practising company secretary certification. See <a href=\"https:\/\/www.kanakkupillai.com\/learn\/new-form-mgt-7a-abridged-annual-return-for-small-company-opc\/\">MGT-7A for small companies and OPCs<\/a>.<\/li>\n<li><strong>Lighter auditor reporting:<\/strong> the CARO 2020 report does not apply to a small company, and some other auditor reporting requirements are relaxed.<\/li>\n<li><strong>Lower penalties:<\/strong> under Section 446B, penalties for a small company are limited to half of the specified amount, subject to a maximum of \u20b92 lakh for the company and \u20b91 lakh for each officer in default.<\/li>\n<li><strong>No mandatory dematerialisation:<\/strong> small companies are exempt from the rule that requires private companies to hold shares in demat form.<\/li>\n<li><strong>No audit rotation:<\/strong> the audit rotation rule does not apply to small companies.<\/li>\n<\/ul>\n<p>Such benefits can be particularly helpful for bootstrapped startups, family-owned businesses, and SMEs that wish to conserve their cash and managerial effort.<\/p>\n<h3>What Small-Company Status Does Not Give You<\/h3>\n<ul>\n<li><strong>An audit exemption:<\/strong> every company, including a small company, must still appoint an auditor and get its accounts audited. The Bill proposes an exemption for prescribed classes of companies, and the Joint Committee would limit it to private companies, but this is not law yet.<\/li>\n<li><strong>A CSR exemption:<\/strong> CSR applies only above net worth, turnover or profit thresholds. It does not depend on small-company status, though a company that qualifies as small will rarely meet them.<\/li>\n<li><strong>Relief from AGMs, registers, GST or income tax filings.<\/strong><\/li>\n<\/ul>\n<p>Reduce avoidable ROC compliance work. Let Kanakkupillai review your company\u2019s eligibility and build a small-company compliance calendar. See our guides on <a href=\"https:\/\/www.kanakkupillai.com\/learn\/difference-between-aoc-4-and-mgt-7-in-annual-filing\">AOC-4 and MGT-7<\/a> and <a href=\"https:\/\/www.kanakkupillai.com\/learn\/annual-compliance-cost-for-private-limited-company-in-india\/\">annual compliance costs for a private limited company<\/a>.<\/p>\n<h2>Small Company vs MSME vs Startup<\/h2>\n<table width=\"650\">\n<thead>\n<tr>\n<td width=\"147\"><strong>Point<\/strong><\/td>\n<td width=\"173\"><strong>Small Company<\/strong><\/td>\n<td width=\"173\"><strong>MSME<\/strong><\/td>\n<td width=\"156\"><strong>Startup<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td width=\"147\">Governing law<\/td>\n<td width=\"173\">Companies Act, 2013<\/td>\n<td width=\"173\">MSMED Act, 2006<\/td>\n<td width=\"156\">DPIIT recognition and Companies Act provisions<\/td>\n<\/tr>\n<tr>\n<td width=\"147\">Test<\/td>\n<td width=\"173\">Paid-up capital and turnover, with exclusions<\/td>\n<td width=\"173\">Investment and turnover<\/td>\n<td width=\"156\">Age, turnover and innovation<\/td>\n<\/tr>\n<tr>\n<td width=\"147\">Benefit<\/td>\n<td width=\"173\">Compliance relief under company law<\/td>\n<td width=\"173\">Credit, procurement and payment protection<\/td>\n<td width=\"156\">Tax, funding and compliance benefits<\/td>\n<\/tr>\n<tr>\n<td width=\"147\">Registration<\/td>\n<td width=\"173\">No separate registration, self-assessed<\/td>\n<td width=\"173\">Udyam registration<\/td>\n<td width=\"156\">DPIIT recognition<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>A company can be both a small company and an MSME, but the two tests are different. See <a href=\"https:\/\/www.kanakkupillai.com\/msme-registration\">Udyam registration<\/a> and <a href=\"https:\/\/www.kanakkupillai.com\/startup-india-registration\">Startup India registration<\/a>.<\/p>\n<h2>What the Bill Does Not Change<\/h2>\n<p>The Bill does not automatically qualify every private company whose capital or turnover does not exceed \u20b920 crore and \u20b9200 crore as a small company. The exact operational thresholds would continue to be notified through rules.<\/p>\n<p>The exclusions relating to public companies, holding companies, subsidiary companies, Section 8 companies, and special Act companies continue to remain untouched.<\/p>\n<p>Moreover, being a small company does not relieve the company of all its corporate liabilities. Such companies must keep the statutory registers, file annual returns and financial statements, convene the required meetings, and more. The Bill also proposes other changes to company law, such as a higher CSR profit threshold, virtual meetings and fast-track mergers. See our guide to the <a href=\"https:\/\/www.kanakkupillai.com\/learn\/latest-amendment-for-limited-liability-partnership\/\">latest amendments to the LLP Act<\/a> for related changes.<\/p>\n<h2>Impact on Indian Startups and SMEs<\/h2>\n<h3>More scope for expansion<\/h3>\n<p>If MCA finally prescribes a higher ceiling, entities with paid-up capital between \u20b910 crore and \u20b920 crore, or revenue between \u20b9100 crore and \u20b9200 crore, will be able to benefit as small companies for a longer duration. That might help save compliance cost at an important stage of business growth.<\/p>\n<h3>More favourable for capital-intensive businesses<\/h3>\n<p>Many enterprises, such as manufacturing, logistics, healthcare, deep-tech and D2C products, need considerable paid-up capital or reach higher revenues before profits. A higher ceiling helps these enterprises scale up without immediately moving into a compliance-heavy category.<\/p>\n<h3>Nothing much for group structures<\/h3>\n<p>A startup with a parent and subsidiary structure does not get any relief just because each entity is privately held. Holding and subsidiary companies remain excluded.<\/p>\n<h2>Small Company Status for Companies in Chennai and Tamil Nadu<\/h2>\n<p>Tamil Nadu has many private companies close to these limits, especially in manufacturing, textiles and engineering clusters in Chennai, Coimbatore and Tiruppur. These businesses often carry higher paid-up capital or turnover, which is the kind of company the proposal is aimed at. A company registered in Chennai files its AOC-4 and MGT-7 or MGT-7A with ROC Chennai, and the filings are online. See our pages on <a href=\"https:\/\/www.kanakkupillai.com\/annual-compliance-filing-for-pvt-ltd-company-in-chennai\">annual compliance filing for a Pvt Ltd company in Chennai<\/a> and <a href=\"https:\/\/www.kanakkupillai.com\/annual-compliance-filing-for-pvt-ltd-company-in-tamil-nadu\">in Tamil Nadu<\/a>, or our <a href=\"https:\/\/www.kanakkupillai.com\/private-limited-company-registration-in-chennai\">private limited company registration in Chennai<\/a> service.<\/p>\n<ul>\n<li>Check your latest balance sheet and profit and loss account against the current \u20b910 crore and \u20b9100 crore limits before choosing between MGT-7 and MGT-7A.<\/li>\n<li>Many Tamil Nadu family companies are close to the limit, so a family or investor capital infusion can change the position.<\/li>\n<li>Family companies with holding and subsidiary structures should review whether the structure is needed. See <a href=\"https:\/\/www.kanakkupillai.com\/learn\/private-limited-company-for-family-business\/\">private limited company for a family business<\/a> for more on structuring.<\/li>\n<\/ul>\n<h2>How to Prepare Before the Law Changes<\/h2>\n<h3>1. Monitor Paid-Up Capital<\/h3>\n<p>Do not increase your paid-up capital without cause. Only paid-up share capital counts, not authorised capital. If your Pvt Ltd is close to the existing \u20b910 crore limit, evaluate whether an increase is really required for your operations and financing. See <a href=\"https:\/\/www.kanakkupillai.com\/change-in-share-capital\">change in share capital<\/a>.<\/p>\n<h3>2. Pay Attention to Turnover<\/h3>\n<p>Turnover is calculated on the basis of the profit and loss account for the immediately preceding financial year. A company that exceeds the notified turnover limit may lose its small company status for the following year.<\/p>\n<h3>3. Analyse Group Structure<\/h3>\n<p>If your Pvt Ltd is a subsidiary, examine the need for that group structure. Restructuring the relationship between a holding company and its subsidiary is a crucial decision.<\/p>\n<h3>4. Keep ROC Filings Up to Date<\/h3>\n<p>Keep your financial statements, share capital records, minutes of meetings and other annual filings up to date. It will help prove your eligibility and make a switch easier if the limits change.<\/p>\n<h3>5. Obtain Professional Advice Before Raising Funds<\/h3>\n<p>Sometimes investors ask for certain capital structures, ESOP pools and subsidiaries for their benefit. Balance the benefits of small-company status with your funding, governance and other requirements.<\/p>\n<p>Planning a funding round or capital increase? Speak to Kanakkupillai before altering your share capital or corporate structure, and see our guides on <a href=\"https:\/\/www.kanakkupillai.com\/learn\/how-transfer-shares-private-limited-company\/\">share transfer<\/a> and <a href=\"https:\/\/www.kanakkupillai.com\/event-based-compliances-in-a-company\">event-based compliances<\/a>.<\/p>\n<h2>How Kanakkupillai Can Help?<\/h2>\n<p>Kanakkupillai is a Chennai-headquartered legal and compliance services company with 19+ years of experience and 1 lakh+ customers served. We can help in these areas.<\/p>\n<h3>Eligibility of a Pvt Ltd as a Small Company<\/h3>\n<ul>\n<li>Evaluate your Pvt Ltd against the current thresholds of capital and turnover.<\/li>\n<li>Check the exclusions: holding company, subsidiary, Section 8 and special Act companies.<\/li>\n<li>Review the financials and ROC filings of the past few years.<\/li>\n<li>Determine the exact compliance benefits available to you.<\/li>\n<li>Monitor the amendments proposed in the Corporate Laws Bill 2026.<\/li>\n<\/ul>\n<h3>Capital Structure of the Company<\/h3>\n<ul>\n<li>Guide you through the implications of increasing your paid-up capital.<\/li>\n<li>Guide you on founder, investor and ESOP capital changes.<\/li>\n<li>Check whether a capital increase will affect the small company status.<\/li>\n<li>Help with share allotments and ROC filings.<\/li>\n<li>Coordinate valuation and capitalisation needs.<\/li>\n<\/ul>\n<h3>ROC Compliance Management<\/h3>\n<ul>\n<li>Maintain a company-specific ROC compliance calendar.<\/li>\n<li>Support annual return and financial statement filing.<\/li>\n<li>Support board meeting documentation and minutes.<\/li>\n<li>Support statutory registers and record maintenance.<\/li>\n<li>Track filing dates to avoid late fees.<\/li>\n<\/ul>\n<h3>Financial Statement Support<\/h3>\n<ul>\n<li>Coordinate preparation of financial statements and schedules.<\/li>\n<li>Coordinate the cash flow statement requirement depending on eligibility.<\/li>\n<li>Ensure that turnover is accounted for correctly in the profit and loss account.<\/li>\n<li>Support auditors and reporting requirements.<\/li>\n<li>Maintain audit-ready documentation.<\/li>\n<\/ul>\n<h3>Advice for Corporate Restructuring<\/h3>\n<ul>\n<li>Evaluate the compliance implications of forming subsidiaries or holding companies.<\/li>\n<li>Advise on group structuring for operational, IP and investment purposes.<\/li>\n<li>Support company conversion and restructuring documentation.<\/li>\n<li>Evaluate whether there is a commercial justification for a group structure.<\/li>\n<li>Coordinate with legal, tax and ROC.<\/li>\n<\/ul>\n<h3>Continuous Regulatory Monitoring<\/h3>\n<ul>\n<li>Monitor the passage of the Corporate Laws (Amendment) Bill, 2026.<\/li>\n<li>Keep an eye on MCA notifications on the prescribed thresholds.<\/li>\n<li>Inform you when the operative thresholds change.<\/li>\n<li>Conduct reviews every financial year-end.<\/li>\n<li>Inform you in advance if a capital or turnover increase makes you ineligible.<\/li>\n<\/ul>\n<p>Stay ahead of the 2026 corporate-law changes. Talk to Kanakkupillai\u2019s experts through our <a href=\"https:\/\/www.kanakkupillai.com\/annual-compliance-of-a-private-limited-company\">private limited company compliance<\/a> page.<\/p>\n<h2>Conclusion<\/h2>\n<p>The Corporate Laws (Amendment) Bill, 2026 is an important Bill for India\u2019s small businesses and startups, as it provides room for higher small-company thresholds. But founders need to keep in mind that they will not become eligible right away, because the Bill increases the maximum permitted thresholds, whereas the MCA will provide the actual thresholds. For most Pvt Ltd companies, the actionable step right now is to monitor paid-up capital and turnover, analyse group structure, and stay ROC compliant.<\/p>\n<div class=\"kp-export-cta\">\n<p class=\"kp-export-cta__title\"><strong>Want to Check Whether Your Private Limited Company Qualifies as a Small Company?<\/strong><\/p>\n<p class=\"kp-export-cta__description\">Get professional assistance with Private Limited Company compliance, small company eligibility assessment, MCA filings, annual returns and statutory requirements. Our experts can help you understand the applicable rules and compliance benefits for your business.<\/p>\n<p><a class=\"kp-export-cta__button\" href=\"https:\/\/www.kanakkupillai.com\/annual-compliance-of-a-private-limited-company\">Get Company Compliance Assistance<\/a><\/p>\n<\/div>\n<h2>FAQs on the Small Company Threshold<\/h2>\n<h3>1. Has the small-company threshold already doubled?<\/h3>\n<p>No. The Corporate Laws (Amendment) Bill, 2026 proposes to double the statutory ceiling from \u20b910 crore to \u20b920 crore for paid-up capital and from \u20b9100 crore to \u20b9200 crore for turnover. The actual operative limits will be prescribed separately through rules.<\/p>\n<h3>2. What is the current small-company limit?<\/h3>\n<p>Under the current MCA-prescribed thresholds, a private company qualifies if paid-up capital does not exceed \u20b910 crore and turnover does not exceed \u20b9100 crore. These limits have applied since 1 December 2025.<\/p>\n<h3>3. Will a Pvt Ltd with \u20b915 crore capital automatically become a small company?<\/h3>\n<p>Not automatically. It may qualify only if MCA prescribes an operative paid-up capital limit above \u20b915 crore, up to the proposed \u20b920 crore statutory ceiling, and the company also meets the turnover and exclusion tests.<\/p>\n<h3>4. Does the Bill apply to public companies?<\/h3>\n<p>No. A small company must be a company other than a public company. Public companies cannot qualify as small companies.<\/p>\n<h3>5. Can a subsidiary qualify as a small company?<\/h3>\n<p>No. Holding companies and subsidiary companies are expressly excluded from the small-company definition, irrespective of their capital or turnover.<\/p>\n<h3>6. What are the main benefits of small-company status?<\/h3>\n<p>Benefits can include no cash flow statement, only two board meetings a year, the simplified MGT-7A annual return, lighter auditor reporting, lower penalties and no mandatory dematerialisation, subject to applicable law.<\/p>\n<h3>7. Does turnover include GST?<\/h3>\n<p>For the Companies Act definition, turnover is determined from the profit and loss account for the immediately preceding financial year. Under the usual accounting treatment, GST collected is not part of revenue, so turnover is generally shown net of GST. Confirm the exact computation with your auditor.<\/p>\n<h3>8. When will the new thresholds take effect?<\/h3>\n<p>The Bill was introduced on 23 March 2026 and referred to a Joint Committee, which presented its report on 3 August 2026. It must complete the legislative process, and MCA must notify the operative thresholds through rules, before companies can rely on any higher limit.<\/p>\n<h3>9. Does authorised capital count for small company status?<\/h3>\n<p>No. Only paid-up share capital counts, as at the last balance sheet date.<\/p>\n<h3>10. Does a small company need a statutory audit?<\/h3>\n<p>Yes. Small-company status does not exempt a company from appointing an auditor. The Bill proposes an exemption for prescribed classes, but it is not law.<\/p>\n<h3>11. Which annual return does a small company file?<\/h3>\n<p>Form MGT-7A, together with Form AOC-4 for the financial statements. Other private companies file Form MGT-7.<\/p>\n<h3>12. Is a small company the same as an MSME?<\/h3>\n<p>No. They are tested under different laws. A small company is defined in the Companies Act, 2013, and an MSME is defined in the MSMED Act, 2006, with separate investment and turnover tests.<\/p>\n<p><strong>Official Sources<\/strong><\/p>\n<ul>\n<li><a href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/home.html\">Ministry of Corporate Affairs (MCA)<\/a><\/li>\n<li><a href=\"https:\/\/prsindia.org\/billtrack\/the-corporate-laws-amendment-bill-2026\">PRS India: The Corporate Laws (Amendment) Bill, 2026<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>A proposed amendment in the Corporate Laws (Amendment) Bill, 2026 suggests doubling the statutory ceiling for a \u201csmall company\u201d from \u20b910 crore&#8230;<\/p>\n","protected":false},"author":32,"featured_media":50276,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[3993],"tags":[],"class_list":["post-50275","post","type-post","status-publish","format-standard","has-post-thumbnail","category-private-limited-company"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Small Company Threshold 2026: Will Your Pvt Ltd Qualify?<\/title>\n<meta name=\"description\" content=\"Corporate Laws Bill 2026 proposes a \u20b920 crore, \u20b9200 crore small company ceiling. 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