Lok Sabha Question No. 3524 (UNSTARRED), answered on 2020-03-16
Subject: One Person Companies
Ministry: CORPORATE AFFAIRS
Asked by: D. M. Kathir Anand

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS LOK SABHA

UNSTARRED QUESTION NO. 3524 ANSWERED ON MONDAY, THE 16 th  MARCH, 2020 PHALGUNA 26, 1941 (SAKA)

## ONE PERSON COMPANIES QUESTION

3524.  SHRI D.M. KATHIR ANAND:

Will the Minister of CORPORATE AFFAIRS कारपोरेट कार्य मंत्री

be pleased to state:

- (a)  whether the formation and implementation of One Person Companies (OPCs) is seen as a milestone in Indian scenario and if so, the details thereof;
- (b)  who is responsible for formulating CSR policies in case of OPCs and what would be the membership criteria for those in the CSR formulation committee;
- (c)  the steps taken by the Government to encourage foreign direct investment in India through One Person Company method; and
- (d) the other steps that have been taken by Government during past two years to promote self-employment?

## ANSWER

THE MINISTER OF STATE FOR FINANCE             (SHRI ANURAG SINGH THAKUR) AND CORPORATE AFFAIRS ( श्री अनुराग स ंह ठाकु र )

वित्त एिं कॉपोरेट कार्य मंत्रालर् में राज्र् मंत्री

(a) to (d):- Companies Act, 2013 has brought in various significant reforms in company law in India allowing a more progressive and competitive approach to do business in India.  The concept of One Person Company (OPC) has been introduced  in  India  vide  Section  2(62)  of  the  Companies  Act,  2013  which enables a single individual to conduct business in corporate form thus having the  benefit  of  limited  liability,  perpetual  succession  etc.  This  concept  has provided opportunities to the small entrepreneurs to corporatize their business activities, grow and contribute towards the economy of the Country.   It further encourages self-employment by providing legal protection in the form of limited liability  to  the  small  entrepreneurs  by  allowing  them  to  move  towards  the organized  sector  from  unorganized  sector  subject  to  specific  provisions applicable  in  case  of  OPCs.  Such  companies  are  considered  as  private companies under the Companies Act, 2013.  Further, as per Section 135 of the Companies Act, 2013 ('Act'), the CSR Committee of a company is responsible for formulating and recommending to its Board the CSR policy of the Company. Every company eligible for CSR shall have three or more directors in its CSR Committee where at least one director shall be an independent director and where a company is not required to appoint an independent director, shall have two  or  more  directors  in  its  CSR  Committee.  The  above  provision,  mutatis mutandis, applies to a One Person Company (OPC) being a private company. Further, the Department of Promotion of Industry & Internal Trade, Ministry of Commerce and Industry stated that Government reviews the FDI Policy on an ongoing  basis  and  makes  changes  from  time  to  time,  to  ensure  that  India remains an attractive & investor friendly destination. It has been the endeavor of the Government to put in place an enabling and investor friendly FDI policy. The intent is to make the FDI policy more investor friendly and remove the policy  bottlenecks  that  have  been  hindering  investment  inflows  into  the country.  However,  no  such  provision  is  available  in  extant  FDI  policy  with regard to encouraging foreign direct investment in India through One Person Company method.

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