Which rules apply at each stage
Most compliance gaps in SME companies come from a rule that switched on at a stage nobody tracked: conversion to public, the DRHP filing, listing, or crossing a capital threshold after listing.
| Stage | What switches on | Guide |
|---|---|---|
| Private company planning an IPO | Conversion to a public company (s.14, INC-27). 100% promoter shares in demat. Rule 9B demat if not a small company. At least 3 years' track record and positive operating profit in 2 of 3 years. | IPO readiness |
| Unlisted public company | s.180 borrowing and asset-sale limits need a special resolution (private companies are exempt). All securities in demat (Rule 9A) and PAS-6 half-yearly. ID, KMP and committee requirements once the paid-up, turnover or borrowing thresholds are crossed. | Companies Act |
| DRHP filed with the exchange | SEBI ICDR Chapter IX: restated financials, issue-structure caps (OFS 20%, GCP 15% or ₹10 cr), 21 days of public comments, promoter lock-in. | IPO readiness |
| Listed on the SME platform | SEBI LODR less the Reg 15(2) exemptions, PIT and SAST Regulations. Companies Act listed-company rules: one-third independent directors, woman director, KMP, audit committee, NRC, vigil mechanism, internal and secretarial audit, e-voting, MGT-15. | SEBI · Companies Act |
| Paid-up above ₹10 cr or net worth above ₹25 cr | LODR Reg 23 related party rules (from 1 April 2025). Six months to comply after crossing. | SEBI |
| Further issue takes paid-up above ₹25 cr | No forced migration since March 2025, but main-board LODR applies, including corporate governance and quarterly results. | SEBI |
| At every stage | MSMED Act: pay micro and small suppliers within 45 days, MSME-1 half-yearly, tax disallowance of late payments, TReDS for turnover above ₹250 cr. | MSME |
The guides
- SME IPO readiness: BSE SME and NSE Emerge eligibility side by side, ICDR Chapter IX issue rules after March 2025, the pre-filing checklist, process and timeline, and migration to the main board.
- SEBI for SME-listed companies: what Reg 15(2) exempts, the day-one set-up, periodic and event-based filings, exchange fines and the escalation ladder.
- Companies Act for listed and IPO-bound companies: every threshold that changes on conversion and listing, event-based forms and the 2025-26 amendments.
- MSME payments and MSME-1: the 45-day rule, interest, the income-tax disallowance under the 2025 Act, MSME-1, TReDS and the 2026 amendment.
- Compliance chart: every recurring filing with its next due date worked out from today.
What changed in 2025-26
- SME IPO rules tightened (ICDR amendment, March 2025). Operating profit of ₹1 crore in 2 of 3 years; OFS capped at 20% of the issue and 50% of each seller's holding; general corporate purposes capped at the lower of 15% or ₹10 crore; no repaying promoter or related-party loans; minimum application above ₹2 lakh; DRHP open for 21 days of public comments; monitoring agency above ₹50 crore; promoter shares above the 20% MPC released in two stages.
- Reg 23 for larger SMEs from 1 April 2025: paid-up above ₹10 crore or net worth above ₹25 crore. Material RPT is the lower of ₹50 crore or 10% of turnover.
- NSE Emerge FCFE formula revised on 20 April 2026 (circular NSE/SME/73818); NSE migration criteria raised from 1 May 2025.
- ICDR (Amendment) Regulations 2026, notified March 2026: draft abridged prospectus and abridged prospectus filing for SME issues.
- LODR December 2024 amendments: compliance officer one level below the board, record-date notice cut to 3 working days, after-hours board outcome within 3 hours, revised Reg 30 materiality test. Integrated Filing (Governance and Financial) replaced several separate filings.
- Companies Act: small company limits raised to ₹10 crore paid-up and ₹100 crore turnover (1 December 2025); board report must disclose POSH complaints and Maternity Benefit Act compliance (from 14 July 2025); revised AOC-4, MGT-7 and MGT-15; DIR-3 KYC once every three years (from 31 March 2026); fast-track mergers widened (September 2025); CSR through the Social Stock Exchange (May 2026).
- MSME: new classification limits from 1 April 2025; TReDS onboarding for companies above ₹250 crore turnover (deadline 31 March 2025); s.43B(h) carried into the Income-tax Act 2025 as s.37(2)(g); MSMED (Amendment) Act 2026 received assent in August 2026.
Proposed, not yet law
- Corporate Laws (Amendment) Bill 2026 proposed: introduced 23 March 2026, Joint Parliamentary Committee report 3 August 2026. Would raise the small company ceiling to ₹20 crore capital and ₹200 crore turnover, raise the CSR net-profit trigger to ₹10 crore, cut fast-track merger approval to 75%, allow virtual AGMs, and decriminalise further offences.
- SEBI review of SME rules proposed: announced August 2026. Ideas reported include easing compulsory market making and 100% underwriting and raising the ₹25 crore post-issue capital cap. No consultation paper yet.
- MSMED (Amendment) Act 2026 verify: passed, but sources differ on whether it is in force from assent or from notified dates.
Official texts
| Material | Publisher |
|---|---|
| ICDR, LODR, PIT and SAST Regulations, master circulars | SEBI |
| SME platform eligibility, circulars and FAQs | NSE Emerge · BSE SME |
| Companies Act, rules, e-forms and circulars | Ministry of Corporate Affairs |
| MSMED Act, notifications, Udyam, Samadhaan | Ministry of MSME |
| Income-tax Act 2025 and rules | Income Tax Department |
Items marked verify rest on secondary sources or conflicting reports; check them against the primary text before relying on them. Items marked proposed are not law yet.