SMALL COMPANIES:
Sec 2(85) ‘‘small company’’ means a company, other than a public company,—
(i) paid-up share capital of which does not exceed fifty lakh rupees (Rs 50 Lakhs ) or such higher amount as may be prescribed which shall not be more than five crore rupees; ( Rs 5 Crores) or
(ii) turnover of which as per its last profit and loss account does not exceed two crore rupees ( Rs 2 crore ) or such higher amount as may be prescribed which shall not be more than twenty crore rupees ( Rs 20 crores ).
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act;
Thus to test whether a Company is Small or not following are the parameters:-
(1) A public company will never be a small company.
(2) A Private company should have a maximum of :-
(a) Paid up capital of Rs 50 Lakhs
(b) Turnover of Rs 2 Crores.
(3) Holding and Subsidiary will always be out of the picture of small companies.
