One Person Company

To encourage unorganized proprietorship business to enter into organized corporate world, the concept of “One Person Company” was recommended by JJ Irani Committee. The One Person Company is an advancement of sole proprietorship form of business. 

There’s is only one person who acts as a member and a minimum of one director who is having full control over the company. It is registered under the regulations of Ministry of Corporate Affairs (MCA).OPC shall be mentioned in brackets below the name of such company, e.g. XYZ (OPC) Private Limited.

Advantages

  • OPC will bring the unorganized sector of proprietorship into the organized version of a private limited company. Various small and medium enterprises, doing business as sole proprietors, might enter into the corporate domain. Proprietors always have unlimited liability. If such a proprietor does business through an OPC, then liability of the member is limited.
  • An OPC has Pvt. Ltd. business structure and enjoys corporate status in society which helps the entrepreneur to attract quality workforce and helps to retain them by giving corporate designations.
  • On the demise of the original director, the nominee director will manage the affairs of the company till the date of transmission of shares to legal heirs of the demised member.
  • It is easier for a company rather than proprietor to get loans from banks.

Documents/Details Required for Incorporation of One Person Company

Following documents of the Proposed Director/Nominee is required: 

  • Two identity proof documents – Copy of Aadhaar Card/ Voter ID Card/ PAN Card (compulsory),
  • One address proof document of registered office (like water, telephone, mobile bill or copy of bank pass book or net banking statement mentioning address of the applicant),
  • Address Proof Document for Registered Address of the OPC: Any utility bill like water bill, electricity bill, property tax receipts or Gas Bill etc. is compulsory required for incorporation of an OPC.
  • Passport size photo of the proposed director & nominee,
  • NOC from Landlord. 

Also some other notable points are :- 

  • Authorised and paid-up Share Capital: capital can be taken as low as Rs. 1,00,000/- and as high as per the requirement.
  • Activities of the proposed Company: List of proposed activities of the OPC under incorporation.
  • Proposed Name of the OPC: a name of the company (name must be unique & not in general nature)and there should not be any existing company exits similar or same to the proposed name.

Documents/Details Required for GST Registration of One Person Company (OPC) After Incorporation

  1. Utility Bill: Only utility bill as Electricity Bill is required or latest Property Tax Receipts is required, either of two is mandatory for GST.
  1. Rent Agreement: Notarised Rent Agreement or proper Lease Deed between owner of the property and one person company (signed by Director of the OPC as representative of the OPC) is also required.
  2. Board Resolution: Board resolution for GST Registration and person authorised in the GST (if more than one director or authorised person is other than single director) is mandatorily required.

Naming Criteria of a One Person Company

  • Just like any other company, the name of an OPC should have a short, unique and meaningful name shall not be identical with or too nearly resembles the name of an existing company.
  • No company shall have a name which, in the opinion of Central Government, is undesirable or the name proposed resembles any connection with Government or State patronage, unless prior approval of the Central Government is obtained.
  • The name should not be such that its use by the company will constitute on offence under any law.
  • The name should not be illegal or offensive.
  • The name should not be misleading for the public.
  • Most importantly, The Companies Act 2013 provides that the words “One Person Company” or “OPC” shall be mentioned in brackets in the name of such company, wherever its name is printed, affixed or engraved, therefore, total suffix will be “(OPC) Private Limited” in case of One Person Company.

Eligibility for registering a One Person Company

  • Only a natural person who is a resident of India can be a sole shareholder.
  • Any company or LLP or partnership firm with financial activities cannot register an OPC.
  • Member of OPC cannot incorporate any other OPC but can be a nominee in another OPC.
  • Nominee must be appointed during registration.
  • When paid up share capital of the company exceeds Rs. 50 lakhs or average annual turnover of immediately preceding 3 financial year exceeds Rs. 2 crore, then OPC must be converted into Private/Public Limited Company.

Minimum requirements of an OPC

  1. Minimum 1 member
  2. Minimum 1 nominee
  3. Minimum 1 director

Maximum requirements of an OPC

  1. Maximum 1 member
  2. Maximum 1 nominee
  3. Maximum 15 directors

Exemptions for a Private Limited Company

Following compliances are not required to be done by an OPC related to meetings  & other compliances:-

  • Sign on annual returns.
  • Hold Annual General Meetings and Board Meetings.
  • Sign on Financial Statements.
  • Option to dispense with the requirement of holding an AGM.
  • Power of Tribunal to call meetings of members.
  • Calling of extraordinary general meeting.
  • Notice of meeting.
  • Statement to be annexed to notice.
  • Quorum for meetings.
  • Chairman of meetings.
  • Proxies
  • Restriction on voting rights.
  • Voting by show of hands.
  • Voting through electronic means.
  • Demand for poll.
  • Postal ballot.
  • Circulation of members’ resolution.

FAQs

There should be at least one member and one director in an OPC.

There can be a maximum of one member and fifteen directors in an OPC.

The company shall file Form INC – 4with the registrar in case of cessation of member/nominee of OPC on account of death, incapacity to contract or change in ownership within 30 days of receipt of the notice. In the same form, user needs to provide details of new member/nominee and Form INC – 3 as consent of new nominee.

Reservation of name using the SPICE+ (INC-32)and within next 20 days, INC-3 shall be filed for nominee consent Form is attached with INC-32, INC-33 should be prepared stating all the required clauses as e-Memorandum of Association followed by INC-34 e-Articles of Association, INC-35 (AGILE PRO) is multipurpose form which helps in Application for GSTIN, ESI pLusEpf, P.TaxRegistration Opening of Bank a/c. AlsoINC-9 would be required as Declaration shall be submitted by each of the subscribers to the memorandum and each of the first directors named in the articles, DIR-12 and DIR-2 stating particulars of first director of the company and his interest in other firms or body corporate along with his consent to act as a director and INC-22 Filing of Registered Office Address.

In case the paid up share capital (PUSC) of an OPC exceeds Rs. 50 lakh or its average annual turnover during the relevant period exceeds Rs. 2 crore, then the OPC has to mandatorily convert into private or public company.

The OPC shall inform ROC in Form INC – 5, if the threshold limits are exceeded and conversion is required.

Form INC – 6 shall be filed in both the cases. It should be filed within 30 days in case of voluntary conversion and within 6 months of mandatory conversion.

Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. The term “resident in India” means a person who has stayed in India for a period of not less than 182 days during the immediately preceding 1 financial year.

A person can be member in only one OPC and the same person can be nominee in only one OPC.

Where a natural person, being member in OPC becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within 180 days, i.e., he/she shall withdraw his membership from either of the OPCs within 180 days.

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