In the year 2005, which expert committee recommended the formation of 'One Person Company' (OPC) ?

Question

Accepted Answer

The correct option is 2: J. J. Irani Expert Committee.

This answer is definitively correct because the J. J. Irani Expert Committee, constituted by the Ministry of Company Affairs in 2005, was specifically tasked with providing recommendations for a comprehensive overhaul of the Companies Act, 1956. Recognizing the need to simplify compliance for individual entrepreneurs and provide them with the benefits of a corporate structure, the committee strongly recommended the introduction of the 'One Person Company' (OPC). The OPC model was suggested to legally recognize sole proprietorships by granting them a separate legal entity and limited liability, a crucial step to formalize the unorganized sector. This landmark recommendation was adopted and finally given statutory backing through the enactment of the Companies Act, 2013, which fundamentally transformed India's corporate legal framework.

The incorrect option is 1: Vyas Committee.
The Vyas Committee, chaired by Dr. V. S. Vyas, was established by the Reserve Bank of India (RBI) to focus on the revitalization of the Rural Cooperative Credit Structure. Its mandate was purely in the domain of agricultural and rural finance, examining the health and future role of cooperative banks and credit societies. The committee's recommendations were aimed at financial reforms in the cooperative sector, which is entirely distinct from corporate governance or the classification of company types. Therefore, this committee had no involvement in the structural design or recommendation of the One Person Company.

The incorrect option is 3: H. S. Mishra Expert Committee.
There is no widely recognized expert committee under the chairmanship of H. S. Mishra associated with the landmark recommendations for the Companies Act, 2013, or the introduction of new corporate forms like the OPC. When studying company law or corporate reforms, students must focus on the key committees, and the J. J. Irani Committee is the only one tied to this specific reform.

The incorrect option is 4: Subramanian Expert Committee.
Committees named after experts like Subramanian, such as the one chaired by Dr. Arvind Subramanian, are typically related to macro-economic policy, taxation, or fiscal matters, such as the review of India’s trade policy or the country's economic survey. These expert groups operate within the Ministry of Finance or the Chief Economic Adviser's office and do not handle the specialized task of restructuring the fundamental legal framework for corporate entities, which falls under the Ministry of Corporate Affairs. Thus, this committee is unrelated to the recommendation for the One Person Company.