Budget 2021: FM announces incentives for incorporation of 1 person companies, to boost startups
New Delhi, Feb 01: Finance Minister Nirmala Sitharaman on Monday proposed to incentivise incorporation of one person companies (OPCs), a move that will benefit startups and innovators.
In her burdget speech, Sitharaman said incorporation of OPCs will be incentivised by allowing such companies "to grow without restriction on paid up capital and turnover, allowing conversion into any other type of company at any time, reducing the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days, and allow also non-resident Indians to incorporate OPCs in India".
"This will be a big boost for startups," she said while presenting the first paperless Union Budget.
- No restriction on paid-up capital and turnover, to incentivise incorporation of one-person companies
- Conversion of one-person company to any other kind, reducing residency limit from 182 days to 120 days
- Allow non-resident Indians to incorporate one-person companies in India
The OPC concept was introduced in the Companies Act, 2013, to primarily benefit entrepreneurs and facilitate easier access to funding sources through an institutional establishment. Apart from India, many nations, including the US, China and Singapore, allow businesses to be structured as OPCs.