Module: General Practice
Q126: The One Person Company (OPC) was introduced in the Companies Act, 2013. Identify the correct combination of features regarding OPCs:
An OPC is a separate legal entity distinct from its single member.
The single member must nominate a "Nominee" who will become the member in case of death or incapacity.
An OPC is permanently prohibited from converting into a Private Limited Company.
The single member must nominate a "Nominee" who will become the member in case of death or incapacity.
An OPC is permanently prohibited from converting into a Private Limited Company.
✅ Correct Answer: A
Correct Option: A. Concept: One Person Company (OPC). Analysis: Statement 1 (Correct): An OPC is a corporate body (Private Limited). The owner's personal assets are protected (Limited Liability), unlike a Sole Proprietorship.
Statement 2 (Correct): It is mandatory to name a Nominee in the Memorandum of Association (MoA) to ensure succession.
Statement 3 (Incorrect): OPCs CAN convert into a Private or Public Limited Company.
The 2021 Union Budget amendments removed the restriction that required an OPC to wait two years before converting, making the process easier.
Statement 2 (Correct): It is mandatory to name a Nominee in the Memorandum of Association (MoA) to ensure succession.
Statement 3 (Incorrect): OPCs CAN convert into a Private or Public Limited Company.
The 2021 Union Budget amendments removed the restriction that required an OPC to wait two years before converting, making the process easier.