Small company threshold to rise to ₹20 crore, government says

The MPs asked the Ministry of Corporate Affairs to explain the rationale for doubling the 'Small Company' capital threshold and to detail steps taken to decriminalize corporate offences and expand the fast-track merger framework. The government replied with a statement outlining the reasons for the threshold change and listing specific amendments made to decriminalize offences and broaden merger eligibility.

Asked by: Shri Trivendra Singh Rawat and Dr. Sanjay Jaiswal; Answered by: Ministry of Corporate Affairs (Minister Smt. Nirmala Sitharaman).

• The paid-up share capital threshold for 'Small Companies' is proposed to increase from Rs. 10 crore to Rs. 20 crore to allow flexibility based on business growth and economic expansion.
• Decriminalization of offences under the Companies Act, 2013, was done in phases: 16 offences in 2019, 35 offences in 2020, and removal of imprisonment for 11 offences in 2020.
• 12 offences under the LLP Act, 2008, were decriminalized in 2021.
• The fast-track merger (FTM) framework was expanded in 2021 to include start-ups, in 2024 to allow cross-border reverse flipping, and in 2025 to include unlisted companies with borrowings not exceeding Rs. 200 crores.
• Provisions exist for deemed approval under the FTM framework to ensure mergers are approved within a 60-day timeline.

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