Small Company, CSR & Other Limits
Small company limits, CSR, strike off and penalty relief.
Key facts
- Small company (from 1 December 2025): paid-up capital up to ₹10 crore and turnover up to ₹100 crore, both conditions together. Public companies, Section 8 companies and holding/subsidiary companies can't be small companies.
- Small company benefits: no cash flow statement required, MGT-7A, only 2 board meetings, auditor rotation doesn't apply, and penalties are half the normal amount (subject to caps).
- CSR applies if, in the previous year, net worth was ₹500 crore or more, turnover ₹1,000 crore or more, or net profit ₹5 crore or more. The company must spend 2% of its average net profit of the last 3 years.
- If the CSR obligation is up to ₹50 lakh, the board itself can do the work of the CSR committee.
- A company can apply for strike off (closure) in STK-2 with a ₹10,000 fee if it has no business for 2 years and no liabilities.
- Anyone holding 10% or more of a company, directly or indirectly, is a significant beneficial owner and must be declared in BEN-2.
Common questions
What is a small company now?
From 1 December 2025, a private company with paid-up capital up to ₹10 crore and turnover up to ₹100 crore. Earlier limits were ₹4 crore and ₹40 crore. Holding and subsidiary companies, Section 8 companies and public companies don't qualify.
What are the benefits of being a small company?
No cash flow statement, a shorter annual return (MGT-7A), only 2 board meetings a year, no auditor rotation, and penalties at half the normal amount.
When does CSR apply?
If in the previous financial year the company had net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more. It must spend 2% of its average net profit of the last three years on CSR.
How do I close a company that has no business?
If it has no business for 2 years and no assets or liabilities, apply to the ROC in STK-2 with a ₹10,000 fee, after filing all pending returns. Otherwise, voluntary winding up under the Insolvency Code applies.
Sources
- Companies Act, 2013 (as amended)