What are the rules for the formation of a One Person Company?

(a) Only a natural person being an Indian citizen and resident in India can form one person company
(b) It cannot carry out non-banking financial investment activities.
(c) Its paid up share capital is not more than Rs. 70 Lakhs
(d) Its average annual turnover of three years does not exceed Rs. 1 Crores.

Choose the correct answer from the option given below.

Choose the correct answer from below.

ab

The correct answer is option 3 - ab.

(a) Only a natural person being an Indian citizen and resident in India can form one person company-  IT IS TRUE.

(b) It cannot carry out non-banking financial investment activitie-  IT IS TRUE

(c) Its paid up share capital is not more than Rs. 70 Lakhs. IT IS FALSE as it is 50 lakhs not 70 lakhs.

(d) Its average annual turnover of three years does not exceed Rs. 1 Crores. IT IS FALSE as it is 2 crore not 1 cr.

 ** One Person Company (OPC): Sec. 2 (62) of the companies Act, 2013, defines OPC as a “company which has only one person as a member”. Rule 3 of the Companies (Incorporation) Rules, 2014 provides that:

• (1) Only a natural person being an Indian citizen and resident in India can form one person company.
• (2) It cannot carry out non-banking financial investment activities.
• (3) Its paid up share capital is not more than Rs. 50 Lakhs.
• (4) Its average annual turnover of three years does not exceed Rs. 2 Crores.