‘‘Small Company’’ means a company, other than a public company,—
i. paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore rupees; or
ii. turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees:
Provided that nothing in this Section shall apply to—
A, a holding company or a subsidiary company;
B. a company registered under Section 8; or
C. a company or body corporate governed by any special Act;
Special Provisions and Exemptions available to a Small Company :
a) The annual return of a Small Company can be signed by the company secretary alone, or where there is no company secretary, by a single director of the company.
b) A small company may hold only two board meetings in a year, i.e. one Board Meeting in each half of the calender year with a minimum gap of ninety days between the two meetings.
c) A small company need not include Cash Flow Statement as part of its financial statement.
d) Provision regarding mandatory rotation of auditor/maximum term of auditor being 5 years in case of an individual and 10 years in case of a firm of auditors.