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Whether a private Company having paid-up share capital 45 Lakhs and turnover of Rs. 20 Crores as per last audited balance sheet will be treated as small company or not?

Whether a private Company having paid-up share capital 45 Lakhs and turnover of Rs. 20 Crores as per last audited balance sheet will be treated as small company or not?

According to section 2(85) define a small company as a company other than a public company –

  • 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.
  • Turnover of which as per its last profit and loss account does not exceed 2 crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees.

Provided that nothing in this clause shall apply to – 

 

  • A holding company or a subsidiary company;
  • A company registered under section 8; or
  • A company or body corporate governed by any special Act .

So, It is a small company.

The word ‘Company‘ is an amalgamation of the Latin word ‘Com’ meaning “with or together” and ‘Pains’ meaning “bread”. Originally, it referred to a group of persons who took their meals together.

A company is nothing but a group of persons who have come together or who have contributed money for some common person and who have incorporated themselves into a distinct legal entity in the form of a company for that purpose.


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