One Person Company Registration - MNC Filings
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One Person Company Registration

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.

Minimum requirements

  • Minimum 1 Shareholders
  • Minimum 1 Director
  • One Nominee
  • Director & shareholder can be same person
  • Minimum Share Capital shall be Rs.100,000
  • DIN(Director Identification Number) for the Director
  • Digital Signature of the Director

Documents Required

  • Two Colour Photograph of Director
  • Self attested copy of Pan card & Address Proof
  • Signature on DIR-4 for allotment of DIN
  • Signature on Subscriber sheet of MOA & AOA
  • Signature on Digital Signature Certificate (DSC) Form

“One Person Company” means a company which has only one person as a member;

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.

Director

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.

  • An OPC provides limited liability to entrepreneurs whereby the liability of the member.
  • OPC’s are a separate legal entity.
  • It also has the feature of perpetual succession,
  • Making it easier for entrepreneurs to transfer ownership and raise capital.
  • No complicated compliances.
  • Easy to incorporate.
  • Less than govt. fees.

“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:-

  • Verification of applicant for application for DIN in form DIR 4.
  • Application for allotment of DIN in form DIR 3 to ROC.
  • Application in form INC 1 to ROC for reservation of name set out in Application as:-
    (a) The name of the proposed company; or
    (b) The name to which the company proposes to change its name. Sec. 4(4).
  • Preparation of Model MOA & Model AOA as per Schedule I may be adopted by a company as may be applicable to the case of the company, either in totality or otherwise Nomination by the subscriber or member of One Person Company. – (Nomination in Form No INC.2 along with consent of such nominee obtained in Form No INC.3).
  • Application with the Registrar within whose jurisdiction the registered office of the company is proposed to be situated, in Form No.INC.2
  • After Satisfying by Registrar, the Certificate of Incorporation shall be issued by the Registrar in Form No.INC.11.
  • No minor can become member & nominee;
  • Cannot incorporated or converted into sec. 8 company;
  • Cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
  • Cannot converted voluntarily into any company unless 2 years have expired from the date of incorporation except threshold limit increased upto 50 lakh or avg. annual turnover increased upto 2 cr.
  • OPC should have minimum 1 director;
  • In case of OPC an individual being member is deemed to be its first director;
  • Where an OPC has only 1 director, the date on which the resolution is signed and dated by such director is considered as the date of the board meeting;
  • Provisions of board meeting, quorum and interested director shall not apply to OPC; if there is only one Director (Proviso of sec. 173(5)
  • OPC need not hold an AGM; Provisions relating to notice, explanatory statement, EGM, quorum, voting, chairman, poll, proxies, postal ballot, NCLT’s power of calling for EGM does not apply to OPC
  • Financial Statements can be signed by only one director;
  • Financial Statements are to be filed with ROC within 180 days from the end of FY;
  • OPC can contract with the sole member who is a director;
  • The financial statement, with respect to OPC, may not include the cash flow statement; – Annual return is to be signed by Company Secretary & if there is no CS then Director of the company;

Financial Statement

“Financial statement” in relation to a company, includes—

  • A balance sheet as at the end of the financial year;
  • A profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year;
  • A statement of changes in equity, if applicable; and
  • Any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iii).
    *Cash Flow Statement is exempted. Annual Return:-

Annual Return:-

– It shall prepare its annual return in Form No. MGT.7.

– Extract of Annual Return:-

  • The extract of the annual return to be attached with the Board’s Report shall be in Form No. MGT.9 (Rule 11)
  • A copy of the annual return shall be filed with the Registrar with fee as may be specified.

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

  • An individual being member shall be deemed to be its first director until the director or directors are duly appointed by the member in accordance with the provisions of this section.
  • Save as otherwise expressly provided in this Act, every director shall be appointed by the company in general meeting
  • No person shall be appointed as a director of a company unless he has been allotted the DIN u/s 154.
  • Every person proposed to be appointed as a director by the company in general meeting or otherwise, shall furnish his DIN and a declaration that he is not disqualified to become a director under this Act.
  • A person appointed as a director shall not act as a director unless he gives his consent to hold the office as director in Form DIR 2 to Company and such consent has been filed with the Registrar within thirty days of his appointment in Form DIR 12 by Company:

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.

  • A private company other than a company registered under section 8 of the Act having paid up share capital of fifty lakhs rupees or less or average annual turnover during the relevant period is two crore rupees or less may convert it self into OPC by passing a special resolution in the general meeting.
  • Before passing such resolution, the company shall obtain No objection in writing from members and creditors.
  • Company shall file copy of the special resolution with the Registrar of Companies within thirty days from the date of passing such resolution in Form No. MGT.14.
  • The company shall file an application in Form No.INC.6 for its conversion into OPC along with fees as provided in the Companies (Registration offices and fees) Rules, 2014, by attaching the following documents, namely:-
  • The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion, the paid up share capital company is fifty lakhs rupees or less or average annual turnover is less than two crores rupees, as the case may be;
  • The list of members and list of creditors;
  • The latest Audited Balance Sheet and the Profit and Loss Account; and
  • The copy of No Objection letter of secured creditors.
  • On being satisfied and complied with requirements stated herein the Registrar shall issue the Certificate.