CHANGE IN THE DEFINITION OF SMALL COMPANY
|Existing Definition||Proposed Definition|
|Small Company - means a Company, other than a Public Company, which fulfills the following criteria:
||Small Company - means a Company, other than a Public Company, which fulfills the following criteria:
This will benefit more than two lakhs Companies in easing their compliance requirements.
WIDER SCOPE OF ONE PERSON COMPANY (OPC)
As proposed in Union Budget – 2021 and as per the Companies (Incorporation) Second Amendment Rules, 2021 which shall come in force with effect from 1st April 2021, the following amendment has been incorporated in the provision of the One Person Company (OPC):
|Old Provision||Proposed Amendments|
|Person resident in India shall be eligible to incorporate the One Person Company||Person ‘resident in India or Otherwise’ shall be eligible to incorporate the One Person Company i.e., Non-Resident Indians (NRIs) is eligible to incorporate the OPC|
|"Resident in India" means a person who has stayed in India for a period of not less than one hundred and eighty two days (182) during the immediately preceding financial year.||"Resident in India" means a person who has stayed in India for a period of not less than one hundred and Twenty days (120) during the immediately preceding financial year.|
|Mandatorily conversion of OPC to Private or Public Company Where the paid up share capital of an One Person Company exceeds fifty lakh rupees and its average annual turnover during immediately preceding three consecutive financial years exceeds two crore rupees, Such One Person Company was be required to convert itself into either a private company with minimum of two members and two directors or a public company with at least of seven members and three directors with 6 Months .||The Mandatorily requirement for the conversion of OPC in to Private or Public Company based of its Paid-up Share Capital and Turnover is waived-off .|
3. OTHER MEASURES
- Decriminalization process for the Limited Liability Partnership (LLP) Act, 2008 will be introduced.
- NCLT framework will be strengthened, e-Courts system shall be implemented and alternate methods of debt resolution and special framework for MSMEs shall be introduced.
- MCA 21 Version 3.0. will be launched with additional modules for e-scrutiny, e-Adjudication, e-Consultation and Compliance Management.
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Tags :budgetunion budget 2021union budgetcorporate law