📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Which of the following statements correctly describes

    the concept of 'One Person Company' (OPC) under the Companies Act, 2013?
    A An OPC must have at least two directors. Correct Answer Incorrect Answer
    B An OPC can only be incorporated as a public company. Correct Answer Incorrect Answer
    C An OPC requires at least two shareholders. Correct Answer Incorrect Answer
    D An OPC is a company with only one member and can be converted into a private or public company. Correct Answer Incorrect Answer
    E An OPC can raise capital from the public through shares. Correct Answer Incorrect Answer

    Solution

    As per Section 2(62) of the Companies Act, 2013, a One Person Company (OPC) is: • A company that has only one person as a member, and • Is typically incorporated as a private company. OPCs allow individuals to enjoy the benefits of limited liability while doing business alone. • An OPC may voluntarily convert into a private or public company once it meets certain thresholds (like paid-up share capital exceeding ₹50 lakh or average annual turnover exceeding ₹2 crore — as per Rule 6 of the Companies (Incorporation) Rules, 2014). • It is not allowed to raise funds from the public. This form is ideal for solo entrepreneurs who want to formalize their business with legal recognition and limited liability.

    Practice Next
    More Other Laws and Acts Questions
    ask-question