20 February

Union Budget 2021- Proposed Amendments to the Companies Act, 2013

MCA notifies that w.e.f. April 1, 2021, any person, whether resident in India or otherwise, shall be eligible to incorporate a One Person Company, and reduces the residency limit for an Indian citizen from 182 days to 120 days.
Removes the bar on conversion of OPCs voluntarily into any kind of company, and also does away with the paid-up share capital limits which if exceeded would earlier cease an OPC of its status as such and mandate its conversion into either a private or a public company.
Further, revamps the process for conversion of OPCs into private/public cos., and states that an OPC may be converted into a private or public co., after increasing the minimum number of members and directors to two or seven members and two or three directors, as the case may be, and maintaining the minimum paid-up capital as per the requirements of the Companies Act where required, and shall file an application.
Also paves way for all private companies to convert into OPCs (extant provisions allow only those private cos. having paid-up share capital of Rs. 50 lakh or less and average annual turnover of Rs. 2 Cr. or less to convert into OPC), by passing a special resolution in the general meeting.