The concept of One Person Company [OPC] is a new form of business introduced by The Companies Act, 2013 [No.18 of 2013], thereby enabling Entrepreneur(s) carrying on the business in the Sole-Proprietor form of business to enter into a Corporate Framework.
One Person Company is a hybrid of Sole-Proprietor and Company form of business, and has been provided with concessional/relaxed requirements under the Act
- Only One Member:
Only a natural person, who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company.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 financial year.
- Nominee for the Member:
The member shall nominate another person who shall become the member in case of death/incapacity of the original member. Such nominee shall give his/her consent for being appointed as the Nominee for the Sole Member. Only a natural person, who is an Indian citizen and resident in India shall be a nominee for the sole member of a One Person Company.
Must have a minimum of One Director, the Sole member can himself be the Sole Director. The Company may have a maximum number of 15 directors.
- A person shall not be eligible to incorporate more than one OPC or become nominee in more than one such company.
- Minor cannot become member or nominee of the One Person Company or can hold share with beneficial interest.
- An OPC cannot be incorporated or converted into a company under Section 8 of the Act.
- An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
- An OPC cannot convert voluntarily into any kind of company unless two years have expired from the date of incorporation of One Person Company, except when paid up share capital is increased beyond Rs.50 Lakhs or its average annual turnover during the relevant period exceeds Rs.2 Crores. In that case OPC has to invariably file forms with the ROC for converting it into a Private or Public Company, within a period of six months.
- Obtain DSC for the proposed Director(s).
- Obtain DIN for the proposed director(s).
- Select suitable Company Name, and make an application to the Ministry of Corporate Office for availability of name.
- Draft Memorandum of Association and Articles of Association [MOA & AOA].
- Sign and file various documents including MOA & AOA with the Registrar of Companies electronically.
- Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp Duty.
- Scrutiny of documents at Registrar of Companies [ROC].
- Receipt of Certificate of Registration/Incorporation from ROC