On March 23, 2026, the government introduced the Corporate Laws (Amendment) Bill, 2026 in the Lok Sabha — and buried in its provisions is a change that matters to a huge slice of India Inc: who counts as a "small company" under the Companies Act.
The numbers that changed
The Bill doubles both thresholds that define a small company:
- Paid-up capital: from ₹10 crore to ₹20 crore
- Turnover: from ₹100 crore to ₹200 crore
A company has to stay under both limits to qualify — but doubling each one significantly widens the pool of businesses that now fit the definition.
Why the threshold matters
"Small company" isn't just a label — it's a distinct compliance track under the Companies Act, built for businesses that don't need the same governance overhead as large, widely-held companies. Companies that qualify get meaningfully lighter obligations: fewer mandatory board meetings, simplified board's reports, and relaxed statutory-audit rotation requirements, among other relief measures built into the small-company regime.
Who this actually pulls in
Until now, plenty of growth-stage startups and closely-held private companies outgrew the ₹10 crore / ₹100 crore thresholds well before they had the governance infrastructure of a large enterprise — leaving them compliant with rules designed for much bigger companies. Doubling both thresholds brings a large number of mid-sized private companies and funded startups back under the lighter regime, right at the growth stage where compliance overhead is most likely to compete with runway.
What to actually do about it
If your company's paid-up capital and turnover both sit under the new ₹20 crore / ₹200 crore marks, it's worth revisiting your governance calendar once the Bill is enacted — board meeting frequency, audit rotation, and board's-report content may all simplify. Company secretaries and auditors advising startups should treat this as a concrete compliance-scoping exercise for the next filing cycle, not just a policy footnote.
The Bill still has to clear Parliament before these thresholds take legal effect — worth tracking as it moves through the legislative process.
Sources: PRS India · India Briefing · Lexology