'Small' businesses will grow when the government changes the definition
According to the government, the updated definitions will make it easier for businesses to conduct business.
admin
The capital and turnover requirements for "small" businesses have been doubled by the government.
The Ministry of Corporate Affairs announced in a notification dated September 15 that the definition of "small" firms under the 2013 Companies Act would be expanded to encompass businesses with paid-up capital under Rs. 4 crore and annual revenues up to Rs. 40 crore.
Previously, the paid-up capital and turnover thresholds were set at Rs 2 crore and Rs 20 crore, respectively.
The new thresholds are effective right now.
"Small businesses make a sizable contribution to growth and employment and represent the innovative spirit and aspirations of thousands of people. The government has always been dedicated to taking steps to improve the business climate for enterprises that uphold the law, including lowering the burden of compliance on such businesses "On September 16, the corporate affairs ministry released a statement.
The government listed several advantages for small businesses as a result of the revised definition, including I the elimination of the requirement to prepare a cash flow statement as part of the financial statement; (ii) the benefit of preparing and filing an abbreviated annual return; (iii) the elimination of the requirement for an auditor to rotate regularly; and (iv) the holding of only two board meetings per year.
