Finance Minister Nirmala Sitharaman said on Monday that non-resident Indians (NRIs) will be allowed to set up one-person compes, the definition of small compes will be revised and various provisions of the Limited Liability Partnership (LLP) Act will be decriminalised.
The proposed relaxations to rules governing One Person Compes (OPCs) are expected to benefit startups and innovators, she said while presenting the Union Budget for FY21-22. OPCs, which have lesser compliance requirements, can be set up with one member.
OPCs will be allowed to grow without any restrictions on paid-up capital and turnover, allowing their 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 also allow NRIs to incorporate OPCs in India.
The Finance Minister also proposed revising the definition of small compes under the Compes Act 2013 by increasing their thresholds for paid-up capital from 'not exceeding Rs 50 lakh' to 'not exceeding Rs 2 crore' and turnover from 'not exceeding 'Rs 2 crore' to 'not exceeding Rs 20 crore.'
"This will benefit more than two lakh compes in easing their compliance requirements," she said.
Sitharaman said the MCA 21 portal will be driven by data analytics, artificial intelligence and machine learning features as well as have additional modules such as for e-adjudication and compliance management.
MCA 21 portal is used for submitting various documents as part of compliance requirements under the compes law.
Sitharaman, who is also in charge of the Corporate Affairs Ministry, said the decriminalising of the procedural and technical compoundable offences under the Compes Act 2013, is now complete. The next step is to take up decriminalisation of the LLP Act 2008.
( With inputs from ANI )
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