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: 

Also some other notable points are :- 

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:-

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.
3. How to inform ROC about the change in membership/nominee of 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.
4. How to incorporate One Person Company?
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.
5. What is the threshold limit for an OPC to mandatorily get converted into either private or public company?
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.
6. How to intimate ROC that the OPC has exceeded the threshold limits?
The OPC shall inform ROC in Form INC – 5, if the threshold limits are exceeded and conversion is required.
7. What form is to be filed for conversion of an OPC into a private or public company or vice-versa?
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.
8. Who is eligible to act as a member/nominee of OPC?
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.
9. In how may OPCs, a person can be a member and a nominee?
A person can be member in only one OPC and the same person can be nominee in only one OPC.
10. What if a member of an OPC becomes a member in another OPC by virtue of being a nominee in that 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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