How will the Budget 2021 announcements on one-person companies help startups and non-resident Indians?
The story so far: In her Budget speech, Union Finance Minister Nirmala Sitharaman announced measures to ease norms on setting up one-person companies (OPCs). Ms. Sitharaman said the step — allowing OPCs to grow without any restrictions on paid-up capital and turnover — would directly benefit start-ups and innovators.
What is an one-person company?
As the name suggests, an one-person company is a company that can be formed by just one person as a shareholder. These companies can be contrasted with private companies, which require a minimum of two members to get going. However, for all practical purposes, these are like private companies.
It is not as if there was no scope for an individual with aspirations in business prior to the introduction of OPC as a concept. As an individual, a person could get into business through a sole proprietorship mode, and this is a path that is…