The Third Schedule to the Companies Act, 2017 sets out the criteria used to classify every company into one of four categories — Public Interest Company (PIC), Large Sized Company (LSC), Medium Sized Company (MSC), or Small Sized Company (SSC). Sections 224 and 225 of the Act tie a company’s classification to the accounting framework and Schedule (Fourth or Fifth) it must follow when preparing financial statements. The definition of “public interest company” in Section 2(53) also refers back to this Schedule. The copy below is updated as on 29 December 2025.

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1. Public Interest Company (PIC)

The top tier, with the most demanding reporting and governance obligations. A company is a PIC if it is any of the following:

  • A listed company — any company whose securities are listed on a securities exchange.
  • A non-listed public sector company, as defined in the Act.
  • A non-listed company registered and/or licensed under legislation administered by SECP, as one of: a Non-Banking Finance Company operating as an Asset Management Company, Pension Fund Manager, REIT Management Company, or Deposit-Taking NBFC; a Modaraba Company; an Insurer; a Securities Exchange; a Commodity Exchange; a Central Depository; a Clearing House; or (added by S.R.O. 921(I)/2024) a securities broker holding a Trading & Self-Clearing or Trading & Clearing licence with custody of customer assets, or a Professional Clearing Member.
  • A company registered, notified and/or licensed under the Banking Companies Ordinance, 1962 or the Microfinance Institutions Ordinance, 2001 — a banking company (including a foreign banking company), a microfinance bank, or a Development Finance Institution (DFI).
  • Any company engaged in the production and sale of sugar — added by S.R.O. 614(I)/2020 (6 July 2020).

Applicable framework: International Financial Reporting Standards (IFRS) — under the Fourth Schedule for listed companies, and under the Fifth Schedule for every other PIC sub-category.

2. Large Sized Company (LSC)

A non-listed company that is not already a PIC, and meets any one of the following (an “or” test, not cumulative):

  • paid-up capital of Rs. 200 million or more; or
  • turnover greater than Rs. 800 million; or
  • 750 or more employees.

Also includes a foreign company with turnover of Rs. 1 billion or more, and a company licensed under Section 42 or Section 45 with annual gross revenue (grants/income/subsidies/donations) of Rs. 200 million or more.

Applicable framework: IFRS, under the Fifth Schedule (Section 42/45 companies additionally follow Accounting Standards for NPOs).

3. Medium Sized Company (MSC)

Non-listed public company that does not meet the LSC test: paid-up capital under Rs. 200 million, turnover up to Rs. 800 million, and fewer than 750 employees. There is no lower threshold — any non-listed public company below LSC size is Medium Sized by default.

Private company with: paid-up capital greater than Rs. 10 million but less than Rs. 200 million; or turnover greater than Rs. 150 million but not exceeding Rs. 800 million; or more than 250 but fewer than 750 employees.

Also includes a foreign company with turnover less than Rs. 1 billion, and a Section 42/45 company with annual gross revenue under Rs. 200 million.

Applicable framework: IFRS for SMEs (public companies in this tier may opt into full IFRS instead), under the Fifth Schedule.

4. Small Sized Company (SSC)

A private company with: paid-up capital up to Rs. 10 million; turnover not exceeding Rs. 150 million; and no more than 250 employees.

Applicable framework: the Revised Accounting and Financial Reporting Standards for Small-Sized Entities (AFRS for SSEs) — with the option to instead follow IFRS or IFRS for SMEs — under the Fifth Schedule.

Rules that apply across every category

  • Classification is based on the previous year’s audited financial statements.
  • A company only moves to a different category once it fails (or meets) the new category’s criteria for two consecutive financial years — a single unusual year does not reclassify it.
  • “Employees” means the average number of persons employed during the financial year, calculated on a monthly basis.
  • A subsidiary of a listed company follows the Fourth Schedule regardless of its own size.
  • A Medium Sized Company otherwise required to use IFRS for SMEs / Accounting Standards for NPOs may opt to use full IFRS instead.
  • A Small Sized Company otherwise required to use Revised AFRS for SSEs may opt to use IFRS or IFRS for SMEs instead.

Note: there is no Small Sized tier for a non-listed public company — only a private company can be Small Sized. A non-listed public company that falls short of the LSC thresholds is always Medium Sized.

Key amendments in force: S.R.O. 602(I)/2022 (14 May 2022) raised the LSC/MSC turnover threshold from Rs. 1 billion to Rs. 800 million and the SSC turnover ceiling from Rs. 100 million to Rs. 150 million. S.R.O. 921(I)/2024 (25 June 2024) added securities brokers (Trading & Self-Clearing / Trading & Clearing, holding customer assets) and Professional Clearing Members as a PIC sub-category. S.R.O. 614(I)/2020 (6 July 2020) added sugar-production/sale companies as a PIC sub-category. S.R.O. 1195(I)/2019 (3 October 2019) and later amendments reshaped the PIC non-listed sub-categories to the licensed-entity list shown above.

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