Overview
The concept of One Person Company is basically amalgamation of two forms of business structure i.e. Sole proprietorship and Private Limited Company. Since sole proprietors didn’t get much recognition and compliance of a Limited Company are cumbersome for a sole proprietor, a mixed form of business entity came into the frame known as One Person Company.
One Person Company is governed under Companies Act, 2013 and persons who are willing to start their business as one person company has to mandatorily comply with the provisions given in Companies Act, 2013
Features
· Companies managed through a single person are known as One Person Company.
· These Companies had feature of a sole proprietorship business and a company limited by shares.
· One Person Company is governed under Companies Act, 2013
· It is incorporated as a Private Limited Company, thus it enjoys the status of separate legal entity and its liability is also limited.
· It gives the owner to control the management of the Company single handily
· Companies Act, 2013 has provided various relaxation like non applicability of secretarial standard provisions, conducting of postal ballot , appointment of independent director, women director.
Minimum Requirement
A One Person Company can be set up with:
1. 1 Director
2. 1 Shareholder
3. 1 Nominee
4. 1 Registered Office
5. 0 minimum requirement of capital
Documents requirement:
1. Digital Signatures
2. PAN/Aadhar
3. Residential Proof
4. Registered office proof
5. Memorandum of Association (MOA)
6. Article of Association (AOA)
7. Consent and other documents
8. Nominee name
9. Nominee ID and Address proof
Points to remember
It is important to note that a minor cannot act as a member in OPC
As per section 3 (1) of Companies Act, 2013, any person willing to incorporate one person company must nominate a person, whose name shall be mentioned in memorandum of association of the Company and who shall, in the event of the subscriber’s death or his incapacity to contract, become the member of that One Person Company. Nominee should be a Natural Person who is an Indian citizen and resident in India
Restriction on membership and Nominee: As per rule 3(2) of the Companies (Incorporation) Rules, 2014 a natural person shall not be member of more than a One Person Company at any point of time and the said person shall not be a nominee of more than a One Person Company
· Object: One Person Company cannot carry business of Non-Banking Finance Company
· Nomenclature: Name of OPC will end with “Private Limited” and also shall include OPC in the name for example XYZ (OPC) Private Limited.
· Director: Minimum requirement of director in OPC is one, however OPC may appoint more than one director.
What is included in this
1. 1 Digital Signature Certificate (DSC)
2. 1 DIN;
3. E-MOA;
4. E-AOA;
5. PAN;
6. TAN;
7. Assistance in opening of Bank Account;
8. Certificate of Incorporation;
9. 24/7 assistance;
10. Time to time legal updates;
11. Follow-up with the MCA
FAQ’s
What are the advantages of an OPC?
An OPC can be formed with one shareholder and one director, also Ministry of corporate Affairs has granted various exemption to an OPC like :
it is not mandatory for OPC to conduct annual general meeting for OPC which is mandatory compliance for private and public limited company
OPC can prepare Board Report in compact format without specifying exhaustive details as required for private and public limited company.
Companies Act, 2013 has provided various other relaxation like non applicability of
secretarial standard provisions, conducting of postal ballot , appointment of independent
director, women director
Who is nominee in OPC?
As per section 3 (1) of Companies Act, 2013, any person willing to incorporate one person company must nominate a person, whose name shall be mentioned in memorandum of association of the Company and who shall, in the event of the subscriber’s death or his incapacity to contract, become the member of that One Person Company. Nominee should be a Natural Person who is an Indian citizen and resident in India.
I wish to nominate name of my Minor daughter as Nominee, can I do so?
No, a Minor cannot act as a nominee
Can I convert my OPC into Private or Public Company?
Any OPC can itself get converted into private or public company by increasing minimum number of members and directors and comply the provision of conversion given under Companies Act, 2013
What are the rules for mandatory conversion from OPC to Private or Public Company?
Rule 6 of the Companies (Incorporation) Rules, 2014 provides for mandatory conversion of OPC If paid up capital of OPC exceeds Rs. 50 Lakh or average turnover exceeds Rs. 2 Crore during the period of immediately preceding three consecutive financial, it will cease to be an OPC.