Small Company as Per Companies Act 2013

A Small Company is privately owned partnerships, sole proprietorships or corporations. These type of companies have fewer employees or have small annual revenue than other structure of a business. The Businesses which are defined as “small” are in terms of being able to apply for government support and qualify for the preferential tax policies which vary depending on the country and the industry.

Benefits of Small Company


The owner can fastly reply to the customer as there will be less number of customers. The big business usually has to face problem while connecting with the customers. The small business does not face these problems frequently. However, the customers will feel satisfied with the services provided by the business.


A most important advantage of having a small business is that there is will be no bureaucracy which means that you have the freedom to implement changes as and when you want to. There is no formal procedure to make any changes in the business. The owner is free to customize his business according to his needs and benefits. However, the owner of the business will free to run his business without any pressure.


It means that you can run your business in the way that makes you happy. The owner will get to decide the values that matter to his business. As well as he can choose to run at a loss or reinvest profits, to keep things small or go for rapid growth.


Starting up the Business It’s perfectly possible to start a business without any capital. If you’ve got friends and family members who are passionate about your business they may wish to help out. This method is much more sustainable. No fixed capital required to start any Small Business. However, the owner can anytime add any amount of capital he wished to in the business.


With the help of ECommerce, the owner can easily choose the way of ECommerce to reach the customers. However, E-commerce will pay benefits to the business and helps to grow.


  • Few Employees

The Small Company do not have a large number of employees. This makes easy for the owner to manage the whole business. However, this creates smooth functioning of the business. Lower the employees smoother the work. Therefore the employees will work actively in the company without any confusion.

  • Small Market Area

The Small Scale Companies restricts themselves to a small area of the market. However, it is a disadvantage but it can gain profits from the small area. As by attracting a large number of the customers towards the company. Therefore it creates an advantage for the small business and gains profits for the business.

  • Knowing Customer Well

The Small-scale types of Company know their customers well as it is a small scale company. The company will have a small number of customers too. This will make the owner focused on the target customers. Hence, will create for profits for the business.

  • Limited Revenue

The area of the market for a small business is small. The small company will have a limited number of employees this will create a disadvantage for the small-scale company. However, the owner will earn a small amount of revenue from the business.

Documents Require For Registration in India

Given below are the documents which are mandatorily required for the registration of the Small-scale Company :

  • PAN Card: The copy of the PAN card of each proposed Director of the registering company. It is a unique identification number which is issued by the Department of Income Tax in India. Therefore, PAN card is mandatory for the Directors who are an Indian Nationals.
  • Residential Proof: A residential proof must be submitted by all of the proposed Directors, during the incorporation of the company to validate the company. Given below are the documents accepted as Residential proof:
  1. Bank Statement
  2. Mobile Bill
  3. Electricity Bill
  4. Telephone Bill
  • Address Proof: In addition to the PAN card, the proposed Directors have to submit their address proof for security purpose. Therefore the submitted address proof must have the name of the respective director.

Given below are the documents which will be accepted as address proof for Indian Nationals:

  1. Adhaar Card
  2. Voter Identity Card
  3. Driving License
  4. Ration Card
  5. Electricity Bill
  6. Telephone Bill

Documents Required for Foreign Nationals

  • Passport: The passports are the most required proofs for the Foreign Nationals Directors. The passports of the foreign directors must also be Apostilled or Notarized in the country it was issued. If the passport does not contain the date of birth then additional documents must be attached. Which should be duly certified or attested or Apostilled or Notarized.
  • Address Proof: In addition to the Apostille or Notarized passport the directors are required to submit. Their address proof which should also be Apostilled or Notarized. Therefore, submitted address proof must have the name of the director as mentioned in the passport. However, the address of the director should be the most current address. The submitted documents should not be old more than 1 year for foreign nationals. Given below are the documents which are accepted as address proof for Foreign Nationals :
  1. Driving license
  2. A form issued by the government of identity containing the address.
  3. Bank Statement
  4. Residence Card

In case the documents are in any foreign language the documents must get translated by the official translator and notarized or Apostilled.

  • Residential Proof: In addition to the Address proof, the Residential proof must also be submitted by the foreign nationals directors during the incorporation of the company. Documents must contain the name of the Directors.

Given below are the documents accepted as Residential Proof for foreign nationals :

  1. Bank Statement
  2. Mobile Bill
  3. Telephone Bill
  4. Electricity bill


A small business has many advantages and disadvantages but it makes easy for the owner of the business to manage the business easily. There is no pressure of workload, no pressure of going to many places due to the small market area.

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