Select Your Location
The Ministry of Corporate Affairs recently amended the One Person Companies Rules after the announcement was made in this regard by the Finance Minister. The MCA has amended the Companies Incorporation Rules 2014. The amendments to the rules governing One Person Companies will come into force from the 1st day of April. In this article, we shall look at the key changes brought in by this amendment.
Table of Contents
As per section 2 (62) of the Companies Act, 2013, One Person Company is a company which has only 1 person as part of its members. This type of company was introduced by the government to encourage self-employment opportunities.
As per the data compiled by the Monthly Information Bulletin on Corporate Sector, there were more than 34,000 one person companies out of the total number of about 1.3 million active companies in India. This record is as of 31st December 2020. The number of OPC was just over 2000 as on 31st March 2015 out of a total of about 1 million companies. Data also signifies that more than half of the OPCs are in business services.
MCA has stated the following objective behind amending the OPC Rules, and they are as follows:
With the above mentioned points in mind, the Ministry of Corporate Affairs has amended the OPCs Rules.
One person company shall alter its memorandum of association and articles of association by passing a resolution according to sub-section (3) of section 122 of the Act to give effect to the conversion and also to make necessary changes.
The Ministry of Corporate Affairs has revised the limit of paid-up capital and turnover of small companies under the Companies Act 2013.
The companies (Compromises, Arrangements, and Amalgamations) Rules, 2016 is amended with a view to ensure fast track process of mergers and amalgamations among start-ups and small companies under the Companies Act 2013. The new rules will now be called Companies (Compromises, Arrangements, and Amalgamations) Amendment Rules, 2021.
With this change it is expected to fasten the mergers and amalgamations between two or more start-up companies, one or more start-up companies with one or more small companies.
Some of the benefits in such case are as under:
As stated at the beginning of this article, the amendments to the rules governing One Person Companies will come into force from the 1st day of April 2021. In her budget speech, Finance Minister Nirmala Sitharaman expressed that allowing OPCs to grow without any restrictions on paid-up capital and turnover will benefit start-ups and innovators.
Read our article:MCA Simplifies Winding up Rules for Small Firms
Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
The Securities and Exchange Board of India (SEBI), the capital markets regulator, has recommend...
The objective of the enactment of the Prevention of Money-laundering Act, 2002, i.e. PMLA (the...
Tax planning is a continuing effort and a management strategy for ensuring the minimization of...
On 18th May 2023, the Securities Exchange Board of India (SEBI) released a Consultation Paper o...
Infrastructure and real estate have been regarded as India's "sunshine sector" since the turn o...
On 22nd May 2023, the Central Board of Direct Taxes (CBDT) issued a new circular under secti...
Are you human?: 9 + 9 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
MCA or Ministry of Corporate Affairs has simplified the process for the incorporation of Companies. It notified two...
04 Mar, 2020
Just as profits drive business, incentives drive managers of the business. Managerial remuneration is a significant...
25 Sep, 2017
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!