The term ‘small company’ is defined under Section 2(85) of the Companies Act, 2013. Under the earlier norms, a company (other than a public company) meeting only one of the following condition would have qualified as a small company:

• Paid-up capital of which does not exceed fifty lakh rupees; or
• Turnover not more than rupees two crore.

The Ministry of Corporate Affairs vide Companies (Removal of Difficulties) Order, 2015 dated February 13, 2015 has stated that for the word “or” occurring at the end, the word “and” shall be substituted. Now, a small company, a company (other than a public company) should not have paid up capital exceeding Rs 50 lakh and turnover not more than Rs 2 crore.