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FM Announces Modifications to Small Companies Definition
During her speech in the Parliament, the Union Finance Minister - Nirmala Sitharaman has proposed changes in the definition of small companies under the Companies Act.
During her speech in the Parliament, the Union Finance Minister - Nirmala Sitharaman has proposed changes in the definition of small companies under the Companies Act.
Going forward, the companies with a paid-up capital of up to Rs 2 crore and a turnover of up to Rs 20 crores will fall under the small company's section.
Earlier, this threshold limit was held at Rs 50 lakh of paid-up capital and a turnover of up to Rs 2 crore. The move by the government is aimed at benefitting over 2 lakh companies in general.
The FM during her speech said that "I propose to incentivise the incorporation of OPC by allowing OPCs to grow without any restrictions on paid-up capital and turnover. Allowing their conversion into any type of company any time. Reducing the residency limit for Indian citizens to 120 days from 180 days. This will be a big boost to startups," she said.
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