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CA Foundation · Business Laws · The Companies Act, 2013

Anita, a resident Indian citizen, wants to form a One Person Company (OPC) and names her sister Rekha as the nominee. Which statement is correct?

An OPC can be formed only by a natural person who is an Indian citizen and resident in India, and the memorandum must name a nominee. A company cannot be its member, and one director is enough, so the first statement is the only correct one.

  1. AAn OPC may be formed only by a natural person who is an Indian citizen and resident in India, and must name a nomineeCorrect
  2. BAn OPC can be formed by any company registered in India as its sole member
  3. CAn OPC need not name any nominee in its memorandum
  4. DAn OPC must have at least two directors from the date of incorporation

Explanation

Only a natural person who is an Indian citizen and resident in India can form an OPC, and the memorandum must name a nominee who takes over on the member's death or incapacity. A company cannot be the member of an OPC. An OPC needs only one director, not two, so the other options fail.

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