Small Company explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rules 1 and 2 of the Companies (Specification of Definitions Details) Rules, 2014 fix the commencement date and give meanings to the working terms used across the Companies Act, 2013 and its rules: digital signature, DIN, e-Form, electronic mode, Fees, Form and others. Rule 2(1)(t) also states the current ceiling for a "small company": paid-up capital not above rupees ten crores and turnover not above rupees one hundred crores.
This article is as amended up to G.S.R. 880(E) dated 1 December 2025 per the MCA e-book. Later amendments should be checked on the official text. Companies tracking the small company limits can use our annual filing of small company and OPC service.
The Rules came into force on 1 April 2014 and were made under section 2(76)(ix) and section 2(77)(iii) of the Act. Rule 2 defines about twenty terms and borrows undefined words from four other Acts. For a small company, the paid-up capital and turnover must not exceed rupees ten crores and rupees one hundred crores respectively, as substituted on 1 December 2025.
Rule 1: short title and commencement
The notification is G.S.R. 238(E) dated 31 March 2014. It was issued under sub-clause (ix) of clause (76) and sub-clause (iii) of clause (77) of section 2, read with sub-sections (1) and (2) of section 469 of the Act. Rule 1(1) names the rules the Companies (Specification of definitions details) Rules, 2014, and rule 1(2) brings them into force on the 1st day of April, 2014. See our section 2 definitions guide for the clauses of the Act these rules fill in.
Rule 2(1): the definitions
Rule 2(1) opens with "unless the context otherwise requires". The terms are:
| Clause | Term | What the rule says |
|---|---|---|
| (a) | Act | The Companies Act, 2013 (18 of 2013) |
| (b) | Certifying Authority | A person licensed to issue a Digital Signature Certificate under section 24 of the Information Technology Act, 2000, and the Certified Filing Center (CFC) under the Act |
| (c), (d) | digital signature; Digital Signature Certificate | As defined in clause (p) and clause (q) of section 2(1) of the Information Technology Act, 2000 |
| (e) | Director Identification Number (DIN) | An identification number allotted by the Central Government to an individual intending to be appointed as director, or to an existing director, to identify him as a director |
| (f) | e-Form | A form in electronic form prescribed under the Act or the rules and notified by the Central Government |
| (g) | electronic Mail | A message sent, received or forwarded in digital form by any electronic communication mechanism, that is storable and retrievable |
| (h) | electronic mode | For section 2(42) of the Act: carrying out electronically based activity, whether or not the main server is in India |
| (i) | electronic record | As defined in clause (t) of section 2(1) of the Information Technology Act, 2000 |
| (j) | electronic Registry | An electronic repository of the Central Government in which information and documents are received, stored, protected and preserved |
| (k) | Executive Director | A whole time director as defined in clause (94) of section 2 of the Act |
| (l) | Fees | The fees specified in the Companies (Registration Offices and Fees) Rules, 2014 |
| (m) | Form | A form set forth in the Act or the rules, to be used for the matter to which it relates |
| (n) | Pre-fill | Automated data input by the computer system from the database in the Central Government's electronic registry |
| (o) | Registrar's Front Office | An office maintained by the Central Government or an authorised agency to facilitate e-filing of documents and their inspection and viewing |
| (p) | Regional Director | A person appointed by the Central Government in the Ministry of Corporate Affairs as a Regional Director |
| (q) | section | A section of the Act |
DIN and its two provisos
The first proviso to clause (e) says a DIN obtained before these rules were notified remains the DIN for the purposes of the Act of 2013. The second proviso says "Director Identification Number" includes the Designated Partnership Identification Number (DPIN) issued under section 7 of the Limited Liability Partnership Act, 2008 and its rules. A director who already holds a DPIN therefore does not need a separate number for this definition.
Electronic mode
Clause (h) defines "electronic mode" for clause (42) of section 2 of the Act. The list in the rule covers business to business and business to consumer transactions and digital supply transactions; offering to accept or inviting deposits or subscriptions in securities in India or from citizens of India; financial settlements, web based marketing, advisory and transactional services, database services and supply chain management; online services such as telemarketing, telecommuting, telemedicine, education and information research; and all related data communication services, whether conducted by e-mail, mobile devices, social media, cloud computing, document management, voice or data transmission or otherwise.
An Explanation was inserted by the Third Amendment Rules, 2021. It says electronic based offering of securities, subscription of them or listing of securities in the International Financial Services Centres set up under section 18 of the Special Economic Zones Act, 2005 is not "electronic mode" for section 2(42). In the e-book the Explanation is printed before items (i) to (v), not after them; read it as applying to the whole clause.
"Or otherwise" for disqualification and vacation
Clause (s) fixes the meaning of "or otherwise" in section 164(1)(d) and section 167(1)(f): any offence for which the person has been convicted by a Court under the Companies Act, 2013 or the Companies Act, 1956. Because the 1956 Act is named in the printed text, check the current law before relying on it. Clause (r) (Total Share Capital) was omitted by the amendment of 7 May 2018.
Rule 2(1)(t): the small company limits
For sub-clauses (i) and (ii) of clause (85) of section 2 of the Act, the paid-up capital and turnover of a small company must not exceed rupees ten crores and rupees one hundred crores respectively. The current wording was substituted by the amendment rules of 1 December 2025. The 2014 figures were two crores and twenty crores. Earlier changes in between are not reliably printed in the e-book, so none is stated here.
| Test | Original (2014) | Current |
|---|---|---|
| Paid-up capital not exceeding | Rupees two crores | Rupees ten crores |
| Turnover not exceeding | Rupees twenty crores | Rupees one hundred crores |
Both limits are tested as the rule words them: "shall not exceed". Whether a particular company gets small company treatment under other sections is a question for those sections; read our thresholds table and One Person Company guide alongside. The rule prints no figure for balance-sheet date or look-back year, so check the Act for how and when the figures are measured.
Example: Meera Textiles Private Limited has paid-up capital below rupees ten crores and turnover below rupees one hundred crores. Both are within the figures printed in rule 2(1)(t), so on those two numbers it is within the small company limits. If its paid-up capital were above rupees ten crores, it would fall outside on capital alone.
Rule 2(2): meanings borrowed from other Acts
Words used in the rules but not defined there, and defined in the Act or in the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the Depositories Act, 1996 or the Information Technology Act, 2000 (or rules and regulations made under them), carry the meaning given there. Where the rules say "Fees", read the fee table in the Registration Offices and Fees Rules; see our article on Rule 12 and filing fees. The rule itself prints no fee.
Who needs this
Company secretaries and accountants use rule 2 every time a form, a DSC, a DIN or the phrase "electronic mode" appears in a compliance task. Promoters and finance heads of growing private companies need rule 2(1)(t) to see whether the small company limits still apply to them after the 2025 change.
Need help with small company status and annual filings?
If you are unsure whether your company stays within the small company limits after the 2025 change, TaxClue can review your paid-up capital and turnover and prepare the annual compliance. See our annual filing of small company and OPC page for what we cover.
Key takeaways
- The Rules took effect on 1 April 2014 under G.S.R. 238(E) of 31 March 2014.
- Rule 2(1) defines terms from "Act" to "section"; clause (r) was omitted in 2018.
- DIN includes a DPIN issued under the Limited Liability Partnership Act, 2008.
- Electronic mode excludes electronic offering, subscription or listing in an IFSC under the Special Economic Zones Act, 2005.
- Small company limits under rule 2(1)(t): paid-up capital not above rupees ten crores, turnover not above rupees one hundred crores.
- Undefined words borrow meanings from four other Acts.
Read next
- Rules 2A, 3 and 4: unlisted public companies, related party and list of relatives
- Rule 12 of the Registration Offices and Fees Rules: filing fees and additional fees
- Section 2 of the Companies Act, 2013: definitions, part 1
- Companies Act thresholds table: small company, CSR, audit committee and more
Disclaimer: Based on the Companies Act, 2013 rules named above as consolidated in the MCA e-book (consulted on 3 October 2026), with the later notifications the article names. Later amendments, fees, forms and the Companies Act, 2013 provisions referred to should be checked. This article is general information, not legal advice; check the official text before acting.