Question

Section $3$ of the companies Act $2013$ allows the formation of a _________.

• A. one person company
• B. private company
• C. public company
• D. none of the above

Answer 1

Answer: (A)

one person company

To encourage the self employment in India, Companies Act 2013 introduced the formation one person company (OPC).

There are certain guidelines issued for formation of OPC:

1) There will be only one promoter/founder of the company

2) There should be one nominee in case of death or any other incapacity of the promoter/founder.

3) Only natural person who is resident of India in the preceding financial year can form the OPC.

4) A person can not form more than one OPC, or can not be nominee of more than one OPC.

5) Rules of OPC do not permit Non Banking Financial Institution.