Determining Your Company’s Size Classification (PIC / LSC / MSC / SSC)

Every company preparing financial statements under the Companies Act 2017 must first work out which of four size categories it falls into — Public Interest, Large, Medium, or Small Sized — because that classification decides which accounting framework applies, and it also drives other obligations: board capex/disposal approval thresholds, board diversity quotas, disability-employment quotas, and even statutory filing fee tiers.

Steps

  1. Check the Public Interest Company (PIC) test first — it overrides everything else. You're a PIC if you are: a listed company; a non-listed public sector company; a non-listed NBFC (asset management, pension fund manager, REIT manager, or deposit-taking), Modaraba, insurer, securities exchange, commodity exchange, central depository, or clearing house; a securities broker with custody of customer assets holding a Trading & Self-Clearing or Trading & Clearing licence, or a Professional Clearing Member; a bank (including a foreign bank), microfinance bank, or development finance institution; or a company engaged in producing and selling sugar.
  2. If you're not a PIC, test against the Large Sized Company (LSC) thresholds: paid-up capital of Rs. 200 million or more, OR turnover greater than Rs. 800 million, OR 750 or more employees — meeting any one is enough. (A foreign company qualifies at Rs. 1 billion turnover; a Section 42/45 company qualifies at Rs. 200 million annual gross revenue.)
  3. If you're below the LSC thresholds, test against the Medium Sized Company (MSC) thresholds — these differ for public and private companies. A non-listed public company is MSC simply by being below the LSC test (no lower floor). A private company is MSC if paid-up capital is over Rs. 10 million but under Rs. 200 million, OR turnover is over Rs. 150 million but not more than Rs. 800 million, OR employees number more than 250 but fewer than 750.
  4. If you're a private company below the MSC thresholds, you're Small Sized (SSC): paid-up capital up to Rs. 10 million, turnover not exceeding Rs. 150 million, and no more than 250 employees. There is no Small Sized tier for a non-listed public company — one that's below LSC size is always Medium Sized.
  5. Match your tier to the correct accounting framework: PIC (listed) uses IFRS under the Fourth Schedule; PIC (other sub-categories), LSC, and MSC use IFRS, IFRS for SMEs, or Accounting Standards for NPOs as applicable, under the Fifth Schedule; SSC uses Revised AFRS for SSEs (or may opt into IFRS/IFRS for SMEs), also under the Fifth Schedule.
  6. Base this year's classification on last year's audited financial statements, not this year's projected figures — and don't reclassify off a single unusual year. You only move tiers after failing (or meeting) the new tier's criteria for two consecutive financial years.
  7. Once classified, check what else the tier changes: board capex/disposal approval limits and mandatory female-representation quotas under the Code of Corporate Governance for PICs and LSCs, the 2% disability-employment quota for PICs with 100 or more employees, and — for a PIC specifically — higher statutory filing fee tiers on certain forms (e.g. the Form-8 scheme-of-amalgamation filing).

Sections involved

§224 Section 224 — Classification of Companies §225 Section 225 — Contents of Financial Statements §216 Section 216 — Company deemed to be a public interest company in certain circumstances §2 Section 2 — Definitions §154 Section 154 — Minimum number of directors of a company §459 Section 459 — Quota for persons with disabilities in the public interest companies

Forms you'll need

Form-8 Form-8 — Filing of Copy of Scheme of Amalgamation

How to file a form

New to SECP's eZfile / LEAP portal? See the step-by-step filing guide →

See Important Definitions

Key terms from Section 2 (Definitions) of the Companies Act, 2017 (and, where noted, the LLP Act, 2017) that matter for this task.

§2(53) public interest company §2(70) turnover
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