One Person Company (OPC)
A One Person Company is a company with a single member. It was introduced by the Companies Act, 2013. OPC extends the concept of limited liability to a company run by a single person. It is similar in respects to a private limited company with certain differences like fewer compliances and relaxation of certain restrictions. Thus, an OPC is subject to all the provisions of the Act like a private limited company unless expressly excluded. Only a natural person who is a citizen of India and resident in India can form OPC.
Obtain DSC and DIN
The proposed directors must obtain a Digital Signature Certificate(DSC) from a authorised DSC makers.
Reservation of name
An application for the reservation of a suitable name must be made in Form No. INC-1.
In case the articles of association contain provisions for entrenchment, the company must inform the Registrar of such provisions in Form No.INC-2 at the time of incorporation of the company or in case of existing companies (by amendment of the articles of association), the same must be filed in Form No.MGT-14 within 30 days from the date of entrenchment of the articles.
Articles of Association
Model articles of association have been provided in Tables F, G, H, I and J of Schedule I, as are applicable, and can be adopted by a company either in totality or otherwise.
Application for Incorporation of OPC
An application must be filed, with the Registrar of Companies(ROC) within whose jurisdiction the registered office of the company is proposed to be situated, in Form No.INC-2.
Signing of Memorandum and Articles of Association
The MOA and AOA of the company must be signed by the sole member who is also the subscriber to the memorandum, who must give details of his name, address, description and occupation, if any, in the presence of at least one witness who must also attest the signature and must also sign and give his details.
Affidavit of Subscriber and the director
The affidavit must be submitted by sole member who has subscribed to the memorandum and named in the articles in Form No.INC-9.
Particulars of Subscriber
The sole member must file the particulars of subscription with the Registrar at the time of incorporation.
Declaration by professionals
The declaration by an Advocate, a Chartered Accountant, a Cost accountant or Company Secretary in practice shall be in Form No. INC-8.
- Minimum authorised share capital required for One Person Company having share capital is Rs.1,00,000/-.
- Minimum and maximum number of members for One Person Company is one only.
- The subscriber to the Memorandum must make the payment for the total amount of shares subscribed by him to the company upon incorporation.
- It is a separate legal entity yet only one person is responsible for the workings of the company. A total contrast from what Sole Proprietorship offers.
- There can be only one member at a time. However, one nominee is mandatory to be appointed. This member and nominee cannot be a minor
- An OPC can be limited by guarantee or limited by shares or unlimited company.
- No OPC can voluntarily convert into any other kind of company within two years from the date of incorporation of One Person Company, except when the threshold limit of paid up share capital, being fifty lakh rupees, is crossed or its average annual turnover during the relevant period exceeds two crore rupees.
- An OPC is required to give a legal identity by specifying a particular name under which the activities of the company can be carried on. The words ‘One Person Company’ must be mentioned below the name of the company, wherever the name is affixed, used or engraved.
- An OPC is subject to the same taxes as a Private Limited Company.
- When an OPC limited by shares or by guarantee enters into a contract with the sole member of the company, who is also the director of the company, the terms of contract or offer must be recorded in writing or contained in a memorandum or recorded in the minutes of the Board meeting held next after entering into the contact.
- An OPC must Inform the Registrar about every contract entered into by the company with the sole member of the company within a period of fifteen days from the date of approval.