A Small Company is defined under Section 2(85) of the Companies Act, 2013, as a private company whose paid-up share capital does not exceed ₹4 crore and whose turnover does not exceed ₹40 crore (as amended; whichever is lower). Small Companies enjoy lighter compliance obligations — they are exempt from preparing cash flow statements, can hold board meetings twice a year instead of four, and are entitled to an abridged Annual Return.