Question

Companies Act, 2013 allows the formation of

• A. Two persons company only
• B. Seven persons company only
• C. Two or more persons company only
• D. One person company also.

Hint:

Remember the key innovations of the Companies Act, 2013. The introduction of the One Person Company (OPC) is a very important one that encourages entrepreneurship by providing the benefit of a corporate structure to a single individual.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
The question asks about the types of companies that can be formed under the Companies Act, 2013, highlighting a significant new type introduced by this Act.
Step 2: Detailed Explanation:
The Companies Act, 2013, continues to allow the formation of traditional companies:
- Private Company: Requires a minimum of two members.
- Public Company: Requires a minimum of seven members.
However, a major innovation of the 2013 Act was the introduction of the concept of a One Person Company (OPC).
- Section 2(62) of the Act defines "one person company" as a company which has only one person as a member.
This new structure allows a single entrepreneur to form a company with the benefit of limited liability, which was not possible under the 1956 Act (which required at least two people even for a private company). Therefore, the 2013 Act allows for the formation of a "One person company also," in addition to the other types.
Step 3: Final Answer:
The Companies Act, 2013 allows the formation of a One person company also.