The federal government has expanded the definition of small firms, permitting a bigger group of companies to profit from lighter compliance guidelines and faster merger approvals.

In a notification issued on December 1, the Ministry of Company Affairs mentioned that firms with paid-up capital as much as Rs 10 crore and annual turnover as much as Rs 100 crore will now qualify as small firms. The earlier limits have been Rs 4 crore and Rs 40 crore.

The modifications take impact instantly underneath the Corporations (Specification of Definition Particulars) Modification Guidelines, 2025.

Small firms obtain a number of relaxations underneath the Corporations Act. They’re exempt from making ready money movement statements and may file a simplified board report. They pay decrease charges for annual filings and face diminished penalties for non-compliance. Mergers between small firms additionally transfer via a fast-track route.

Small firms are required to carry a minimum of one Board assembly in every half of a calendar yr, with a minimal hole of 90 days between the 2 conferences.