ONE PERSON COMPANY
A new concept has been introduced in the Companies Act 2013, about the One Person Company (OPC). In a Private Company, a minimum of 2 Directors and Members are required whereas in a Public Company, a minimum of 3 Directors and a minimum of 7 members. A single person could not incorporate a Company previously.
But now as per Section 62 of the Company’s Act 2013, a company can be formed with just 1 Director and 1 member. It is a form of a private company but the compliance requirements are lesser than that of a private company.
One Person Company (OPC): Process of Registration
1. Apply for DSC: The first Step is to obtain the Digital Signature Certificate (DSC) of the proposed Director which required the following documents:
2. Apply for DIN: Once the Digital Signature Certificate (DSC) is made, the next step is to apply for the Director Identification Number( DIN) of the proposed Director in Form DIR – 3 along with the name and the address proof of the director.
3. Name Approval Application: The next step while incorporating an OPC is to decide on the name of the Company. The name of the Company will be in the form of “ABC (OPC) Private Limited”. We have to file INC – 1 for the name approval to the Ministry of Corporate Affairs (MCA) by giving 6 names in the order of the preference along with the significance of keeping that name. Once the name is approved by the MCA we move on to the next step.
4. Documents Required: We have to prepare the following documents which are required to be submitted to the ROC:
The Memorandum of Association (MoA) which are the objects to be followed by the Company or stating the business for which the company is going to be incorporated
The Articles of the Association (AoA) which lays down the bylaws on which the company will operate.
Since there are only 1 Director and a member, a nominee on behalf of such person has to be appointed because in case he becomes incapacitated or dies and cannot perform his duties the nominee will perform on behalf of the director and take his place. His consent in Form INC – 3 will be taken along with his PAN card and Aadhar Card.
Proof of the Registered office of the proposed Company along with the proof of ownership and a NOC from the owner.
Affidavit and Consent of the proposed Director of Form INC -9 and DIR – 2 resp.
A declaration by the professional certifying that all compliances have been made.
5. Filing/Approval of forms with MCA: All these documents will be attached to Spice Form, Spice MOA and Spice AOA along with the DSC of the Director and the professional, and will be uploaded to the MCA site for approval.
After uploading, Form 49A and 49B will be generated for the PAN and TAN generation of the Company which have to be uploaded to MCA after affixing the DSC of the proposed Director
6. The issue of the certificate of Incorporation: On verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and we can commence our business.
Features of One Person Company (OPC)
1. Only One Shareholder:
Only a natural person, who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company. 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.
2. 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 One Person Company.
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.
Terms and Restrictions of OPC
A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.
Minor cannot shall 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. [Company not for Profit].
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 threshold limit (paid up share capital) is increased beyond Rs.50 Lakhs or its average annual turnover during the relevant period exceeds Rs.2 Crores i.e., if the Paid-up capital of the Company crosses Rs.50 Lakhs or the average annual turnover during the relevant period exceeds Rs.2 Crores, then the OPC has to invariably file forms with the ROC for conversion in to a Private or Public Company, with in a period of Six Months on breaching the above threshold limits.