All About One Person Company

The Concept and Salient features of One person Company

One Person Company (OPC) is defined in sub section 62 of section 2 of the Companies Act, 2013 which reads as follows:

“One person company means a company which has only one member”

The important features of the One Person Company (OPC) –

1. OPC has only one person as a member/shareholder.

2. OPC can be registered only as a Private Company.

3. OPC may be either a company limited by share or a company limited by guarantee or an       unlimited company.  

4. An OPC limited by shares shall comply with following requirements:  

a. Shall have minimum paid up capital of INR 1 lac.

b. Restricts the right to transfer its shares

c. Prohibits any invitations to public to subscribe for the securities of the company.

5. An OPC is required to give a legal identity by specifying a name under which the activities of the business could be carried on.

The words “One Person Company” should be mentioned below the name of the company, wherever the name is affixed, used or engraved.

At the time of incorporation it is mandatory to appoint Nominee for the one person company. 

Rules for such nominations are described in the Section 2(1) of the Companies (Incorporation) Rules, 2014.which are as follows:

·        

    >Nominee should be natural person who is an Indian citizen and resident in India shall be eligible to incorporate/ form a OPC. Indian resident means who has stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.

     > A nominee for OPC has to be a natural person who is an Indian citizen and resident in India.

·      >No person shall be eligible to become a nominee in more than one OPC.

·     >At the time of incorporation of OPC, the sole member of OPC is required to appoint another person as his nominee and his name shall have to be mentioned in the Memorandum of Association of the OPC.

*Documents required before starting One Person Company (OPC)

·         Step-1    First obtain DIN

o   Permanente Address Proof

§  Passport

§  Driving License

§  Aadhaar Card

o   Education qualification of the applicant

o   Identity Proof

§  PAN Card

§  Passport

·         Step-2    he applicant should provide the following details:

o   Proposed name : Maximum 6 names can be quoted which will be considered on the basis of name subscribed (first to last basis)

o   Proposed business to be carried on

o   Capital to be contributed for the formation

o   State in which registered office of the LLP to be situated

o   Details of nomine

·   Step-3 Final Step: After obtaining name availability, within 60 days we have to file incorporation documents with ROC. The following are the attachments:

o   Memorandum of Association of the Company

o   Articles of Association of the Company

o   Proof of identity of the member and the nominee

o   Residential proof of the member and the nominee

o   Consent of the nominee in form INC.3

o   Affidavit from the subscriber and first director to the memorandum in the form no. INC.9

o   Specimen signature in form INC.10

o   List of all the companies (specifying their CIN) having the same registered office address, if any; specimen signature in form INC.10

o   Consent from director

o   Proof of registered office address

o   Copy of PAN card of member and nominee

o   Details of duration of stay at present address if it is less than one year address of the previous residence has to be provided

o   Details of the name of the nominee

o   Details of entrenchment of articles.

Types of OPC:

One person company may be:

·         company limited by shares or

·         company limited by guarantee or

·         An unlimited company

·

Annual General Meeting:

As per section 96(1) of the Companies Act 2013, the provision relating to holding of AGM is not mandatory for a OPC.

Board Meeting:

At least one board meeting must be held in each half of the calendar year and the gap between the two meetings should not be less than ninety days.

For the purposes of holding board meetings, in case of one person company which has only one director, it shall be sufficient compliance if all resolutions to be passed by such a company at a board meeting, are entered in the minutes book required to be maintained under section 118 and signed & dated by the member and such date shall be deemed to be the date of the board meeting for all the purposes under this act. If OPC has only one director, it is exempted from holding Board meetings.

Closure of One Person Company

·        > When Share Capital Exceeds 50 Lacs

·    > When Average Annual Turnover the Entity in the relavent period exceeds Rs. 3 Crore. >Here relevant period means Immediately 3 Preceding Previous year.

Benefits of One Person Company

·         Very less compliance

·         Private Company Benefit

·         Less incorporation Cost

·         Less maintenance Cost

·         Easy and Fast Incorporation

·         No Annual General Meeting

Conclusion:

One Person Company is the revolutionary concept in the new Paradigm Companies Act, 2013. It is expected to generate lots of opportunities for the small and Medium Scale Industries.