# Small Company
## Definition
A Small Company is a company, other than a public company, that satisfies BOTH of the following criteria:
| Criterion | Statutory Cap | Currently Prescribed (Revised) |
|---|
| Paid-up Share Capital | ≤ ₹ 50 Lakhs OR as prescribed (cannot exceed ₹ 10 Crores) | ≤ ₹ 4 Crores |
| Turnover (as per P&L of immediately preceding FY) | ≤ ₹ 2 Crores OR as prescribed (cannot exceed ₹ 100 Crores) | ≤ ₹ 40 Crores |
Both conditions must be satisfied to qualify as a small company.
## Exclusions — These Can NEVER Be a Small Company
1. A Holding company or a Subsidiary company of any other company.
2. A Section 8 Company (non-profit).
3. A company or body corporate governed by a Special Act.
4. A Public company (already excluded by the definition itself).
## Key Point
The turnover is to be checked for the immediately preceding financial year, as per the Profit & Loss Account.
### Example 1
Example: ABC Pvt. Ltd. has Paid-up Capital of ₹ 3 Crores and Turnover of ₹ 35 Crores. It is a wholly-owned subsidiary of XYZ Ltd. Is ABC a small company?
Answer: No. Although ABC satisfies the PUSC limit (≤ ₹ 4 Cr) and turnover limit (≤ ₹ 40 Cr), it is a subsidiary of another company, which is an excluded category. Hence, ABC is NOT a small company.
### Example 2
Example: PQR Pvt. Ltd. has Paid-up Capital of ₹ 3.5 Crores and Turnover of ₹ 45 Crores. Is it a small company?
Answer: No. Although PUSC is within ₹ 4 Cr, the turnover (₹ 45 Cr) exceeds the prescribed limit of ₹ 40 Cr. Both conditions must be satisfied. Hence, NOT a small company.
### Example 3
Example: A Section 8 company has PUSC of ₹ 10 Lakhs and turnover of ₹ 50 Lakhs. Is it a small company?
Answer: No. Section 8 companies are specifically excluded from being classified as small companies, irrespective of their capital or turnover.