By Priya Singh, K.L.E. Society’s Law College.
With the enactment of the Companies Act, 2013 and the incorporation of the concept of One Person Company (hereinafter referred to as OPC) in it, the legal mandate by Companies Act, 1956 that required a minimum of two shareholders and two directors has now been struck down. As the name suggests, the OPC consists of only one shareholder. The need for minimum of two directors has also been brought down to a minimum of one director and maximum of fifteen. . The idea of OPC was mooted by the J J Irani Committee which was set up to take a comprehensive view on the changes necessary in the Companies Act, 1956 in context of the changing economic and business environment This has opened floodgates of opportunities for the entrepreneurs who wanted to independently carry on their business and their only resort being sole proprietary, which is an arduous task, given its unlimited liability and non-recognition as a separate entity in the eyes of the law. (more…)