As the name suggests, One Person Companies (OPCs) are companies that have only one person or member. Recently, Union Finance Minister has made some announcements related to OPCs in the Union Budget 2021-22.
The Finance Minister has announced to promote innovators and start-ups by incentivizing the incorporation of One Person Companies (OPCs).
As per the minister, OPCs should be allowed to grow without any restrictions on turnover and paid-up capital.
The announcement also said that OPCs should be allowed to convert to any other type of company at any time.
As a major announcement, the minister called for decreasing the residency limit for an Indian citizen to set up an One Person Company. The current residency limit is 182 days and it has been announced to be reduced to 120 days.
The minister also announced allowing Non-Resident Indians (NRIs) to incorporate OPCs in India.
Start-ups in India
The government of India has identified 41,061 start-ups in the country till now. This sector is growing rapidly in India with the emergence of more and more unicorns in the market. There are around 38 unicorns in India and at least 12 start-ups were added to the list in the year 2020.