MCA allows NRIs to incorporate One Person Companies
Published On: Wednesday, February 3, 2021 | By: Team KnowMyStock
he ministry of corporate affairs (MCA) amended the Companies Rules to revise the definition of a small company and to allow non-resident Indians (NRIs) to incorporate one-person companies (OPCs) in India. The changes, announced by finance minister Nirmala Sitharaman during her budget speech on Monday, will come into effect from April 1, according to the notifications. Paid-up capital and turnover of the small company shall not exceed rupees two crores and rupees twenty crores respectively,” the notification said. The previous definition was based on thresholds defined by the Companies Act which mentioned a maximum paid-up capital of Rs 50 lakh and turnover of Rs 2 crore for the immediately preceding fiscal. Amendments to the Act in 2018, contained provisions for increasing the paid-up capital and turnover thresholds for small companies up to Rs 10 crore and Rs 100 crore, respectively.
The move is expected to lighten the compliance burden of about 200,000 companies, Sitharaman had said.
With regard to OPCs, the amendment has substituted the words “whether resident in India or otherwise” to the clause that earlier stipulated that only an Indian resident could incorporate an OPC.
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