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Definition of small company as per companies act 2013

sreekanth p d (article) (318 Points)

05 June 2015

Dear all Kindly do the need full Asap

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Deepak Gupta (CA Student) (15922 Points)
Replied 05 June 2015

To be classified as a ‘small company’, a company now needs to fulfill both the conditions laid down in section 2(85) of the Companies Act, 2013.
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- The Companies (Removal Of Difficulties) Order 2015, dated 13.02.2015
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Conditions to be fulfilled:
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Paid-up share capital should not exceed Rs. 50 lakh AND turnover (as per its last profit and loss account) should not exceed Rs. 2 crore. Earlier the requirement was to fulfill either one of the two conditions.
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Definition not applicable to a holding/subsidiary/section 8/special act company.

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sreekanth p d (article) (318 Points)
Replied 05 June 2015

Thanks a lot sir. Now with this the companies whose turnover exceeds 2 cr in preceding financial year,needs to prepare the cash flow statements. Am I correct..

Deepak Gupta (CA Student) (15922 Points)
Replied 05 June 2015

Yes, Mr. Sreekanth, your observation is correct.
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From FY 2014-15 onwards, cash flow statement is a compulsory part of the financial statement, except in the case of one person company, dormant company and small company [Sec. 2(40)].
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Since the company is not fulfilling the turnover criteria in order to be classified as a small company, it shall prepare cash flow statement.