CUET Preparation Today
A per Rule 3 of the Companies (Incorporation) Rules, 2014 which of the following is not true in respect of One Person Company (OPC)? |
Only a natural person being an Indian citizen and resident in India can form one person company It can carry out non-banking financial investment activities. Its paid up share capital is not more than Rs. 50 Lakhs Its average annual turnover of three years does not exceed Rs. 2 Crores |
It can carry out non-banking financial investment activities. |
Correct answer: Option (2) → It can carry out non-banking financial investment activities. Concept: One Person Company (OPC) under Rule 3 of the Companies (Incorporation) Rules, 2014, from Accounting for Share Capital. Rule 3 provides that an OPC may be formed only by a natural person who is an Indian citizen and resident in India, its paid-up capital must not exceed Rs. 50 lakh and its average annual turnover of three years must not exceed Rs. 2 crore – so Options (1), (3) and (4) are true. However, an OPC CANNOT carry out non-banking financial investment activities (including investing in securities of a body corporate). As the question asks which statement is NOT true, Option (2) is correct. |
