One Person Company (OPC) is a new type of business structure in India, introduced through the Companies Act, 2013. One Person Company is a hybrid between a Private Limited Company and Proprietorship, providing a single entrepreneur with a host of features only available for an association of people.
Only One Shareholder:
Only a natural person, who is an Indian citizen and resident in India shall be eligible to incorporate a OPC.
Explanation: 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 one calendar year.
Nominee for the Shareholder:
The Shareholder shall nominate another person who shall become the shareholders in case of death/incapacity of the original shareholder. Such nominee shall give his/her consent and such consent for being appointed as the Nominee for the sole Shareholder. Only a natural person, who is an Indian citizen and resident in India shall be a nominee for the sole member of a OPC.
Must have a minimum of One Director, the Sole Shareholder can himself be the Sole Director. The Company may have a maximum number of 15 directors.
Minimum Paid-up Capital
1 lakh rupees
Benefits Of One Person Company
An OPC has multiple advantages when compared to a Proprietorship or a Private Limited Company.
“The above benefits are not available for a Proprietorship. When compared to a Private Limited Company, an OPC has much lesser compliance burden making it an ideal business structure for small businesses.”
Formation of Company
Incorporating a OPC in India is very similar to the incorporation of a Private Limited Company. A one person company may be formed for any lawful purpose by one person.
Compliances for formation:-
“Financial statement” in relation to a company, includes—
– It shall prepare its annual return in Form No. MGT.7.
– Extract of Annual Return:-
Annual General Meeting:-
(The provisions relating to holding of AGM in 2013 Act are similar to 1956 Act)
But not required to held AGM by OPC
Provided that in the case of appointment of an independent director in the general meeting, an explanatory statement for such appointment, annexed to the notice for the general meeting, shall include a statement that in the opinion of the Board, he fulfills the conditions specified in this Act for such an appointment.
OPC will be deemed to have complied with the provisions of this section if at least one meeting of the BOD has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days.
Provided that nothing contained in this sub-section and in Sec. 174 shall apply to OPC in which there is only one director on its Board of Directors.