SMALL COMPANY COMPLIANCE CHECKLIST

SMALL COMPANY COMPLIANCE CHECKLIST
(Applicable from FY 2025–26 as per revised thresholds w.e.f. 01-12-2025)
Eligibility: Paid-up Capital ≤ ₹10 Crore AND Turnover ≤ ₹100 Crore

1. Annual Eligibility Verification
   A company qualifies as a Small Company only if all the following are satisfied:

Incorporated as a Private Limited Company

Paid-up Capital ≤ ₹10 Crore

Turnover in preceding FY ≤ ₹100 Crore

Not a: holding company, subsidiary, Section 8 company, public company, or company governed by any Special Act (banking/insurance/NBFC etc.)
Failure of any condition makes the company ineligible.

2. Meetings: Board & Shareholders
   Board Meetings: Only two per FY with minimum 90 days’ gap
   • One between 1 April–30 September
   • One between 1 October–31 March
   Annual General Meeting (AGM): Within 6 months of FY end (First AGM within 9 months).
   Quorum (Private Company): Two members personally present.

3. Financial Statements – Relaxation
   Small Companies need not prepare a Cash Flow Statement. Mandatory components:
   • Balance Sheet
   • Statement of Profit & Loss
   • Notes to Accounts
   • Auditor’s Report
   • Director’s Report

4. Annual ROC Filings
   Form | Due Date | Benefit
   AOC-4 / AOC-4 XBRL | 30 days of AGM | No Cash Flow Statement
   MGT-7A | 60 days of AGM | Abridged Annual Return
   ADT-1 | 15 days of AGM | Auditor rotation not applicable
   Signing of Annual Return: CS or, if no CS, any one Director. 

5. Auditor-Related Exemptions
   Exemptions:
   • Auditor Rotation (Sec 139(2))
   • Reporting on Internal Financial Controls (IFC)
   • Mandatory Internal Audit
   Still mandatory: Annual Statutory Audit & proper auditor appointment.

6. Director’s Report – Simplified
   Only essential disclosures required:
   • Overview of affairs
   • Financial summary
   • Directors' Responsibility Statement
   • Material changes, if any 

7. Internal Audit
   Internal audit applies only to specified classes based on turnover/assets.
   Small Companies are exempt. 

8. Penalty Relaxation
   Penalties reduced to 50% of normal penalties.
   Examples:
   ₹1,00,000 → ₹50,000
   ₹50,000 → ₹25,000

9. Fast-Track Merger (Sec 233)
   Eligible for merger:
   • With another Small Company
   • With its Wholly Owned Subsidiary
   Benefits: No NCLT approval, quicker timelines, reduced compliance.

10. Event-Based Compliances (No Relaxation)
    Mandatory forms: DIR-12, PAS-3, SH-7, CHG-1/CHG-4, INC-22, MGT-14 (as applicable).
    No exemptions available.

SUMMARY – KEY DIFFERENCES