Ch1 and 2

Rajesh has formed a ‘One Person Company (OPC)’ with his wife Roopali as nominee. For the last two years his wife Roopali is suffering from terminal illness and due to this hard fact he wants to change her as nominee. He has a trusted and experienced friend Ramnivas who could be made nominee or his (Rajesh) son Rakshak who is of seventeen years of age. Whom should he nominate as nominee in place of his wife?

• Since blood relation can only be appointed as nominee in case of OPC, Rajesh needs to appoint his son Rakshak.

• Rajesh can appoint his friend Ramnivas as nominee in his OPC

• Roopali is not agreeable to the proposal of Rajesh and hence, Rajesh cannot change her as the nominee

• Either Rakshak or Mr. Ramnivas can be appointed as nominee

A Ltd. is the holding company of B Ltd. Another company C Ltd. is the subsidiary company of B Ltd. Is there any relationship between A Ltd. and C Ltd.

• There is no relationship between A Ltd. and C Ltd

• C Ltd. is deemed to be the subsidiary of A Ltd

• A Ltd. shall be deemed to be the holding company of C Ltd. provided A Ltd. acquires at least 10% stake in C Ltd.

• C Ltd. shall be deemed to be the subsidiary of A Ltd. if the latter company acquires minimum 10% stake in the former company within six months after C Ltd. becomes subsidiary of B Ltd

Vinay and Sanjay made a name reservation application accompanied by requisite fee to the Registrar for forming a new private company. The Registrar accorded its approval for reservation of most preferred name Vinanjay Softwares Private Ltd. on 7th July, 2018. By which date necessary documents for incorporation of the company must be submitted to the Registrar so that the reserved name does not get lapsed.

• Latest by 20th July, 2018

• Latest by 27th July, 2018

• Latest by 4th August, 2018

• Latest by 4th September, 2018

Mr. Purshottam Prasad, a business graduate from leading B-School, running the chain of restaurants; as sole proprietor concern; based in Chennai. Mr. Prasad being dynamic businessman, in order to develop the business; decided to give corporate form to his business; but concerned with dilution of the control over business decisions. Mr. Prasad, during some journey met Mr. Chinmay Dass; who is school days friend of Mr. Prasad and presently working in one of leading corporate advisory firm. Mr. Prasad seeks advice from Mr. Dass, regarding conversion of sole proprietorship concern to company and also explain his intention to keep the entire control in his hand. Mr. Dass told, about new type of company; which can be formed under Companies Act, 2013; One Person Company (OPC). Mr. Dass quoted section 2 (62), which define 'one person company' , a company which has only one person as a member. Mr. Prasad, felt OPC is correct form of business for him, hence promotes an OPC ‘Casa Hangout Private Limited’ (One Person Company) on 14th September 2019, to which he sold his sole proprietor business and himself became sole member. Mr. Prasad, appointed his younger son Mr. Vijay, who was 21 year old then; as Nominee to OPC. Mr. Anand who is old friend of Mr. Prasad was appointed as director of OPC, Mr. Prasad himself also become director of company. Mr. Vijay is professional photographer, and for some certification course went to abroad on 23rd October 2019. He came back on 1st of March 2020. He established photo-studio in form of OPC ‘Best Click (OPC) Private Limited’ on 20th March 2020, in which Mr. Prasad is nominee and he became sole member. In mean time, Mr. Vijay also gave his consent as nominee to another OPC in which his elder brother Mr. Shankar is sole member. Mr. Prasad met an accident on 25th March, 2020, in which he lost his life. Nomination clause invoked, resultantly Mr. Vijay has to take charge over ‘Casa Hangout (OPC) Private Limited’ (One Person Company) as member with immediate effect. On 30 th March, 2020 Mr. Shankar was appointed as new nominee to ‘Casa Hangout (OPC) Private Limited’, who gave written consent on 31st March 2020. Mr. Shankar who is investment banker by profession, is of opinion that ‘Casa Hangout (OPC) Private Limited’ need to amend its object clause and add ‘carry out investment in securities of body corporate’ as one of object. Financial Period closed on 31st March 2020. Financial statements of ‘Casa Hangout (OPC) Private Limited’, which is not containing cash flow statement; signed by Mr. Anand (who left as only director after death of Mr. Prasad)

A. With reference to appointment of Mr. Vijay and Mr. Shankar as nominee to ‘Casa Hangout (OPC) Private Limited’, out of followings, who is eligible to be nominee of OPC?

• Any natural person excluding minor

• Any legal person excluding minor

• Any natural person, who is resident of India; but excluding minor

• Any natural person, who is resident as well as citizen of India; but excluding minor

B. Mr. Shankar if wish to withdraw his consent as nominee, can do so; by giving written notice to

• Director of OPC and to sole member of company

• Director of OPC and to Registrar of companies

• Sole member of company and to OPC

• Sole member of company and to Registrar of companies

C. With reference to legal position of Mr. Vijay as member/s and nominee/s to various OPCs, Which of the following statement is correct in reference to ceiling limit in relation to membership and being nominee to OPC? A person, other than minor; at specific point of time;

• Can be member in any number of OPCs but nominee in one OPC

• Can be member in one OPC and nominee in any number of OPCs

• Can be member in one OPC and nominee in another one OPCs

• Can be member and nominee both in any number of OPCs

d. Which of following statement is correct, in reference to requirement for financial Statements of ‘Casa Hangout (OPC) Private Limited’

• Must be signed by one director

• Must be signed by at-least by two directors

• Must contain cash flow statement as part of financial statements

• None of the above

E. With reference to opinion of Mr. Shankar to add ‘carry out investment in securities of body corporate’ object, ‘Casa Hangout (OPC) Private Limited’

• Can’t carry out non-banking financial investment activities & investment in securities of body corporate

• Can’t carry out non-banking financial investment, but can invest in securities of body corporate’

• Can carry-out non-banking financial investment & invest in securities of body corporate’

• None of the above

Roma along with her six friends has got incorporated Roma Trading Ltd. in May 2019. She kept the paid-up share capital at 30 lacs. Further, in April 2020, she noticed that in the last financial year, the turnover of the company was well below 2 crores. Advise whether the company can be treated as a ‘small company’

• Roma Trading Ltd. is definitely a ‘small company’ since its paid-up capital is much below ` 50 lacs and also its turnover has not exceeded the threshold limit of ` 2 crores

• The concept of ‘small company’ is applicable only in case of a private limited company/OPC and therefore, despite meeting the criteria of ‘small company’ it being a public limited company cannot enjoy benefits of ‘small company’.

• Unlike a private limited company/OPC which automatically becomes a ‘small company’ as soon as it meets the criteria of ‘small company’, Roma Trading Ltd. being a public limited company has to maintain the norms applicable to a ‘small company’ continuously for two years so that, thereafter, it is treated as a ‘small company’

• If all the shareholders of Roma Trading Ltd. give an undertaking to the ROC stating that they will not let the paid share capital and also turnover exceed the limits applicable to a ‘small company’ in the next two years, then it can be treated as a ‘small company’

After some time, Sudha (the mother of Ramesh) passed away. However, before the death, Sudha had made a WILL, in which she mentioned that after her demise, her another son Suresh be made nominee in the OPC-1. When Suresh came to know this fact, he argued with Ramesh to fulfil the wish of Sudha as per her WILL (Mother of Ramesh and Suresh), but Ramesh denied this and appointed Rachna (his wife) as nominee. Aggrieved from the decision of Ramesh for not nominating him (Suresh), Suresh threatened Ramesh to take appropriate legal action against him for not honouring the WILL of mother Sudha and consulted his lawyer. Meanwhile due to continuous threatening and hot talks between Suresh and Ramesh, Rachna became mentally upset and became insane, as certified by the medical doctor, so lost her capacity to contract. In this situation, Ramesh being the nominee in OPC-2 became member and director of this OPC-2. One of the friends of Ramesh advised him to do some charitable work of providing free education to the girl children of his native village near by Jaipur. Ramesh thought about this proposal and asked his professional friend Sudhanshu to convert this OPC-2 into Section 8 company Based on the above facts, answer the following MCQs

1. Since Rachna, being insane, lost the capacity to contract, Ramesh (who was nominee) became the member of OPC-2. Now who will make nomination for this OPC:

• Ramesh in the capacity of husband of Rachna can nominate any person as Nominee of OPC-2

• Ramesh (who was nominee) of OPC-2 has now become member of this OPC and now as a member of this OPC he can nominate any person as per his choice as Nominee for this OPC.

• When no person is nominated, the Central Govt. will make nomination of such OPC-2.

• When no person is nominated the Registrar shall order the company to be wound up.