Notes on Types of Companies under the Companies Act, 2013

Small Company [Section 2(85)]

  • Definition: a company (private) with size thresholds; not a public company.
  • Thresholds (as per MCA notifications):
    • Paid-up capital ≤ 2\,\text{crores} (increased from 50\,\text{lacs} to 2\,\text{crores}) or such higher amount as prescribed, not more than 5\,\text{crores}; or
    • Turnover ≤ 20\,\text{crores}.
  • Exclusions: holding company or subsidiary; company registered under section 8; or governed by any Special Act.
  • Annual Return: must file in Form No. MGT-7.
  • Salient features:
    • Only a private company can be a small company.
    • Exclusions: holding/subsidiary/charitable company or company governed by a Special Act.
    • For a small company, either the paid-up capital ≤ 2\,\text{crores} or turnover ≤ 20\,\text{crores}.
    • Status can change year to year; benefits may be withdrawn/restored in different years.
  • Special Provisions and Exemptions Available to a Small Company (similar to One Person Company, not all):
    • Annual Return can be signed by the company secretary alone, or by a single director if no company secretary.
    • Maximum of two board meetings in a year with a minimum 90‑day gap.
    • May not require Cash Flow Statement in financials.
    • Auditor rotation provisions apply.

Listed Company [Section 2(52)]

  • Definition: a company which has any of its securities listed or listed on a recognised stock exchange.
  • Amendments: as per the Companies Amendment Act, 2020; and Rules under the Act (2021) insert a carve‑out.
  • 2A. Companies not to be considered as listed:
    • Public companies not listed with equity shares on a recognised stock exchange but with listed debt securities or shares issued on private placement (convertible or non‑convertible) under SEBI rules; or both.
    • Private companies which have listed their non‑convertible debt securities on a recognised stock exchange on a private placement basis under SEBI Regulations, 2008.
    • Public companies not listed with equity shares but whose equity is listed on a foreign/jurisdictional exchange specified under Section 23(3).
  • Practical effect: these classes are not treated as "Listed Companies" for the purposes of the Act despite some securities being listed.

Dormant Company (Section 455)

  • Definition: a company formed for a future project or to hold an asset or intellectual property, with no significant accounting transactions.
  • Inactive company: has not carried on any business or operations or has not filed financial statements/annual returns in the last two financial years.
  • Significant accounting transaction (for deeming not dormant): any transaction other than
    (a) payment of fees to the Registrar;
    (b) payments to fulfil requirements of the Act or other law;
    (c) allotment of shares to fulfil requirements of the Act;
    (d) payments for maintenance of its office and records.

Unregistered Companies (Section 375)

  • Definition: includes partnership firms, limited liability partnerships, societies, co‑operative societies, associations or a company with more than seven members at the time of winding up petition before the Tribunal.
  • Exclusions from the term "unregistered":
    (i) railway company incorporated by Parliament or any Indian law;
    (ii) a company registered under this Act;
    (iii) a company registered under any previous companies law and not having its registered office in Burma, Aden, Pakistan immediately before separation.