CAN AN OPC CARRY ON NON-BANKING FINANCIAL INVESTMENT ACTIVITIES (NBFC) INCLUDING INVESTMENT IN SECURITIES OF ANY BODY CORPORATES?

 CAN AN OPC CARRY ON NON-BANKING FINANCIAL INVESTMENT ACTIVITIES (NBFC) INCLUDING INVESTMENT IN SECURITIES OF ANY BODY CORPORATES? 

 RESTRICTION FOR CARRYING OUT INVESTMENT ACTIVITIES BY OPC 

As per Rule 3(6) of the Companies (Incorporation) Rules, 2014, an OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporates. Such objects / provisions are to be removed from the MoA / AoA while you incorporate the company. Otherwise MCA will reject your form. 

MISUSE OF THE OPC STRUCTURE 

OPC is designed as a simplified vehicle for small entrepreneurs, not for financial or investment activities. 

The restriction avoids misuse of the OPC structure for NBFC-like operations without RBI registration/oversight 

NBFC REQUIREMENT BY RBI 

Any entity (including a private/public company) that wants to carry out financing, lending, or investment in securities as a business must obtain NBFC registration from RBI (if financial assets & income from such activities ≥ 50% of total). 

BOTH MCA AND RBI WOULD NOT PERMIT  

It is to be notified that Both MCA and RBI would not allow an OPC to carry on non-banking financial investment activities, including investment in securities of other companies. 

R V SECKAR FCS,LLB 79047 19295