Small Company as Per Companies Act 2013

A Small Company is privately-owned partnerships, sole proprietorships, or firms. These types of companies have a lesser number of employees or have small annual revenue than other structures of a business. The Businesses which are defined as “small” are in terms of being able to apply for support from the government and qualify for better tax policies which vary depends on the country and the industry.

Benefits of Small Company


The owner can quickly reply to the customer as there is less number of customers. Big businesses usually face problems while connecting or communicating with customers. Small businesses do not face these issues frequently. But, the customers 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 full control and the freedom to make changes as and when you want to. There is no formal process to make any changes in the business. The business owner is free to tailor his business according to his needs and benefits. However, the business owner will be free to run his business without any pressure.


It means that you can run your business in the way that you want. The owner decides the values that matter to his business. As well as he can opt to run at a loss or invest profits, to keep things small or go for faster growth.


While starting up the Business, It is seemingly possible to start a business without any capital. If you have friends and family members who are passionate about your business they may help you out. This method is much more sustainable. No fixed capital is required to start a Small Business. However, the owner can anytime add any amount of capital he wants to in his business.


With the help of E-commerce, the business owner can easily select the way of e-commerce to reach out to the customers. Nevertheless, E-commerce will pay benefits to the business and helps to grow.


  • Few Employees

The Small Company doesn’t have a large number of employees. This makes it easy for the business owner to manage the whole business effortlessly. Nonetheless, this creates a smooth functioning of the business. The lower the number of employees, the smoother is the work. Therefore the employees will work actively in the company without any misunderstanding.

  • Small Market Area

Small businesses often restrict themselves to a small area of the market. Though it is a disadvantage it can gain profits from the small area, by attracting a large number of customers to the company. Therefore it creates an advantage for the small business and gains fair profits for the company.

  • Knowing Customer Well

Small-scale types of companies know their customers very well. The companies usually have a small number of customers too. This will make the business owner focused on target customers. This, in turn, will create profits for the business.

  • Limited Revenue

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

Documents Require For Small Company Registration in India

The documents which are required for the registration of the Small-scale Company are given below:

  • PAN Card: The copy of the PAN card of each projected Director of the registering company. It is a unique identification number which is allotted by the Department of Income Tax in India. Therefore, a PAN card is compulsory for the Directors who are an Indian Nationals.
  • Residential Proof: A residential proof must be submitted by all of the projected Directors, during the incorporation of the company to legalize the firm. Given below are the documents that are 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, which is absolutely mandatory. Therefore the submitted address proof must have the name of the respective directors.

Given below are the documents which can 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 NRI in Small Company Registration

  • Passport: The passports are the most important, required proofs for the Foreign Nationals Directors. The passports of the foreign directors must also be Apostilled or Notarized in the country the passport was issued. If the passport does not have 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 needed to submit, their address proof which should also be Apostilled or Notarized. Thus, the submitted address proof must have the name of the director as mentioned in the passport. But, the address of the director should be the most current address. The submitted documents should not be older 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 they must get translated by the official translator and notarized or Apostilled.

  • Residential Proof: Along with the Address proof, the Residential proof must also be submitted by the foreign national’s 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 is easy for the business owner to manage the business easily and successfully. There are no pressure of workload, no pressure of going to many places due to the small market area. You can apply for business and after that business income return with Legalraahi.

To know more about small company Visit |Small Business  or visit us at company registration