In line with the changes proposed in Budget 2021, the Ministry
of Corporate Affairs (MCA) has notified the provisions beneficial
to start-ups, One-Person Companies (OPC) and small companies. This
note discusses the amendments effected in the Companies Act 2013
(The Act) along with the Companies Rules which will further
facilitate the ease of doing business in India and provide a more
robust corporate legal structure for companies.
- Incorporation of OPC simplified
The Companies (Incorporation) Second Amendment Rules, 2021 shall
be effective from 1st April, 2021. These rules
incentivize the incorporation of OPCs and are summarized as
below:
- The conversion of private companies into OPCs have been made
easier by removing the restrictions on turnover and paid-up share
capital. Earlier, private companies having paid up share capital of
“INR 50 lakhs” or less and average annual turnover of
“INR 2 crores” or less could have converted themselves
into OPC;
