Tycoon Private Limited is the holding company of Glassware Private Limited. As per the last profit and loss account for the year ending 31st March, 2023 of Glassware Private Limited, its turnover was ` 1.80 crore and paid up share capital was ` 80 lakh. The Board of Directors wants to avail the status of a small company. The Company Secretary of the company advised the directors that Glassware Private Limited cannot be categorized as a small company. In the light of the above facts and in accordance with the provisions of the Companies Act, 2013, you are required to examine whether the contention of Company Secretary is correct, explaining the relevant provisions of the Act.\nOR\nMNP Private Ltd. is a company registered under the Companies Act, 2013 with Paid Up Share Capital of ` 5 crores and turnover of ` 35 crores. Explain the meaning of the "Small Company" and examine the following in accordance with the provisions of the Companies Act, 2013:\ni) Whether the MNP Private Ltd. can avail the status of small company?\nii) What will be your answer if the turnover of the company is ` 45 crores?\nOR\nABC Private Limited is a registered company under the Companies Act, 2013 with paid up capital of ` 35 lakhs and turnover of ` 2.5 crores. Whether the ABC Private Limited can avail the status of a Small Company in accordance with the provisions of the Companies Act, 2013? Also discuss the meaning of a Small Company.\nOR\nState with reasons whether the following companies can be treated as Small Companies with reference to the provisions of the Companies Act, 2013:\n1 - STS Pvt. Ltd., having a turnover of ` 10 crores and the paid-up capital of ` 1 crore (1,00,000 equity shares of ` 100 each). Out of these 60,000 equity shares are held by UV Infratech Pvt. Ltd.\n2 - ZX Ltd., having a paid-up capital of ` 3 crores and turnover of ` 35 crores.

As per section 2(85) of the Companies Act, 2013, Small Company means a company, other than a public company:\ni) paid-up share capital of which does not exceed four crore rupees or such higher amount as may be prescribed which shall not be more than ten crore rupees, and\nii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed forty crore rupees or such higher amount as may be prescribed which shall not be more than one hundred crore rupees\nProvided that nothing in this clause shall apply to—\na) a holding company or a subsidiary company;\nb) a company registered under section 8; or\nc) a company or body corporate governed by any special Act.\nIn the instant case, as per the last profit and loss account for the year ending 31st March, 2023 of Glassware Private Limited, its turnover was to the extent of ` 1.80 crore, and paid-up share capital was ` 80 lakh. Though Glassware Private Limited, as per the turnover and paid-up share capital norms, qualifies for the status of a ‘small company’ but it cannot be categorized as a ‘small company’ because it is the subsidiary of another company (Tycoon Private Limited).\nHence, the contention of the Company Secretary is correct.\nOR\ni) In the present case, MNP Private Ltd., a company registered under the Companies Act, 2013 with a paid up share capital of ` 5 crores and having turnover of ` 35 crore. Since only one criteria of share capital of ` 4 crores is met, but the second criteria of turnover of ` 40 crores is not met and the provisions require both the criteria to be met in order to avail the status of a small company, MNP Ltd. cannot avail the status of small company.\nii) If the turnover of the company is ` 45 crore, then both the criteria will be fulfilled and MNP Ltd. can avail the status of small company.\nOR\nIn the instant case, since the paid-up capital of ABC Private Limited is ` 35 Lakhs and turnover is ` 2.5 crore, it can avail the status of a small company as both the requirements with regard to paid-up share capital as well as turnover are fulfilled by the Company.\nOR\n1 - In the instant case, (i) STS Pvt. Ltd. though is a small company taking into account its turnover and paid up share capital (i.e. ` 10 crores and ` 1 crore respectively), but since it is the subsidiary c.ompany of UV Infratech Pvt. Ltd. (UV Infratech Pvt. Ltd. holds ` 60,00,000 equity share capital of STS Pvt. Ltd.), hence STS Pvt. cannot be considered as small company. \n2 - ZX Ltd. cannot be considered as a small company since it is a public company.