Introduction
If you run a private company that has been hovering near the “small company” thresholds, December 2025 is a real inflection point. With effect from 1 December 2025, the Ministry of Corporate Affairs (MCA) has enhanced the thresholds for classification as a “small company” raising the paid-up capital limit to ₹10 crore and the turnover limit to ₹100 crore.
The Government’s stated policy direction is clear: bring more companies into the “small company” net and ease the compliance load for that expanded segment.
This is not a “theme” or an informal announcement. It is implemented through a formal rule amendment notified as G.S.R. 880(E), which substitutes the relevant clause in the Companies (Specification of definition details) Rules, 2014 for purposes of section 2(85) of the Companies Act, 2013.
The revised thresholds
Under the substituted clause (t) of rule 2(1), a company qualifies as a “small company” for section 2(85)(i) and (ii) if:
- Paid-up capital does not exceed ₹10 crore, and
- Turnover does not exceed ₹100 crore
The stated policy objective
The Government has placed this change within a wider Ease of Doing Business framing. PIB states that the enhanced thresholds “bring more number of companies under the definition of small company,” and such companies are “subject to lesser compliance requirements in comparison to larger companies.”
That is the point to emphasise in your narrative: this is an expansion move, it widens the base of companies eligible for the “small company” classification and its lighter compliance posture.
PIB also links compliance reforms with the rollout of the MCA21 V3 portal, describing it as a digital platform intended to streamline filings and improve compliance processes through upgraded workflows and validation features.
For companies, the practical takeaway is: the compliance ecosystem is increasingly expected to be digital-first, and regulatory easing (like the small company expansion) is being positioned alongside digital process strengthening, not in opposition to it.
Conclusion
From 1 December 2025, MCA has expanded the “small company” threshold parameters to ₹10 crore paid-up capital and ₹100 crore turnover, through a formal rule amendment notified as G.S.R. 880(E).
The Government stated objective is to bring more companies into the small company category and reduce the relative compliance burden for that expanded segment, while continuing to strengthen digitised compliance infrastructure through MCA21 V3.
For private companies operating at the cusp of the earlier thresholds, this change is worth treating as more than a technical tweak; it may meaningfully reshape which compliance regime you fall into, and how you plan your corporate filings going forward.
Expositor(s): Adv. Jahnobi Paul
