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Under section 2(85)(ii) of the Companies Act, 2013, what are the statutory base turnover amount and the…

Section 2(85)(ii) uses turnover in the immediately preceding financial year. The statutory base is ₹2 crore and the ceiling for prescribing a higher amount is ₹100 crore.…

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Under section 2(85)(ii) of the Companies Act, 2013, what are the statutory base turnover amount and the upper limit for prescribing a higher turnover amount for a small company?

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Answer and explanation

Correct answer D

Section 2(85)(ii) uses turnover in the immediately preceding financial year. The statutory base is ₹2 crore and the ceiling for prescribing a higher amount is ₹100 crore. The 2017 amendment raised the statutory ceiling from ₹20 crore. Separately, the 2025 amendment to the definition rules prescribes a turnover limit of ₹100 crore and a paid-up capital limit of ₹10 crore. The small-company definition also has conditions and exclusions beyond turnover.

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Option A

₹10 crore is the statutory ceiling for prescribing the paid-up capital amount under section 2(85)(i), while the turnover ceiling is ₹100 crore.

Option B

₹50 crore is not the turnover ceiling in section 2(85)(ii).

Option C

₹20 crore was the earlier statutory turnover ceiling. The 2017 amendment raised it to ₹100 crore.

Option D

The statutory base and ceiling in section 2(85)(ii) are ₹2 crore and ₹100 crore respectively.

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