Companies (Specification of Definitions Details) Amendment Rules, 2021

The notification issued by MCA on Companies (Specification of Definitions Details) Amendment Rules, 2021 . The brief summary of the notification is as detailed below:

Notification date

01.02.2021

Applicability

To Small Company

Effective date

01.04.2021

Subject

Companies (Specification of Definitions Details) Amendment Rules, 2021

Brief Description:

In the Companies (Specification of Definitions Details) Rules, 2014, in the rule 2, in sub-rule (1), after clause (s), the following clause shall be inserted, namely:-
“(t) For the purposes of sub-clause (i) and sub-clause (ii) of clause (85) of section 2 of the Act,

paid up capital and turnover of the small company shall not exceed rupees two crores and rupees twenty crores respectively.”

The concept of small company was introduced under section 2(85) of the Companies Act which had earlier defined  as small company if – 

  • It has a paid up share capital of not more than INR 50 lakh or such higher amount as may be prescribed which shall not be more than INR 10cr.
  • It has an annual turnover of not more than INR 2 cr or such higher amount as may be prescribed which shall not be more than INR 100 cr. 
Major Impact :

The move is expected to lighten the compliance burden from companies and their directors.

Notification is attached herewith for your ready reference
and reading.