One Person Company(OPC)

As per section 2(62) of the Companies Act, 2013, “One Person Company” means a company which has only one person as a member. OPC is a package that combines the benefit of Sole Proprietorship and company form of business. One Person Company of sole-proprietor and company form of business has been provided with concessional /relaxed requirements under the Companies Act, 2013.

KEY FEATURES

  1. OPCs are not proprietorship concern and hence, they give a dual entity to the company as well as the individual, guarding the individual against any pitfalls of liabilities. This is the fundamental difference between OPC and sole proprietorship.
  2. Unlike a private limited or public limited company, OPCs need not bother too much about compliances
  3. Businesses currently run under the proprietorship model could get converted into OPCs without any difficulty
  4. OPCs require minimal capital, to begin with. Being a recognized corporate, it could well raise capital from others like venture capital financial institutions, etc., thus graduating to a private limited company
  5. A One Person Company needs to have a minimum of one director. It can have directors up to a maximum of 15 which can also be increased by passing a special resolution as in case of any other company. But Shareholder should be one
  6. One person cannot incorporate more than one OPC or become nominee in more than one OPC
  7. OPC is a separate legal entity having perpetual succession, limited liability
  8. OPC is exempt from many complicated compliances such as exemption in general meetings, board meetings, quorums, voting inclusion of cash flow statements in financial statements, mandatory rotation of an auditor. It is to be noted that a Board meeting must be conducted if there is more than one director. OPC is also exempted from transacting business via postal ballot. Further, the appointment of a company secretary is also not essential for an OPC. The annual return of an OPC can be signed by its director in case of no company secretary.


Documents Required for OPC Incorporation

  1. Director Identification Number (DIN) and DSC for all the Director(s) & Promoter
  2. PAN, ID Proof and Address Proof of a Promoter and all the Director(s) along with Photo
  3. Application for Name Approval in R.U.N and Approval of the Same [Note that Name desired should not resemble the name of existing registered company and shall not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950)
  4. Drafting of Documents and Filing of e-Forms namely MOA/AOA
  5. Proof of office/registered address (Property Document if self-owned or Lease/Rental Agreement) and latest copies of utility bills
  6. Brief Writeup on the nature of business to be carried on in the proposed OPC

We assist in incorporating OPC and Some of the Frequently Asked Question about OPC is enumerated below:


1] Who Can Start OPC?

Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. For the above purpose, 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.

Therefore, only Indian Citizen who is resident can form OPC


2] A person can be a member of how many OPCs

A person can be a member of only one OPC.


3] What if a member of an OPC becomes a member of another OPC by virtue of being a nominee in that other OPC?

Where a natural person, being a member of a One Person Company becomes a member of another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days.


4] Is there any threshold limits for an OPC to mandatorily get converted into either private or public company

In case the paid-up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover of immediately preceding three consecutive financial years exceeds two crore rupees, then the OPC has to mandatorily convert itself into a private or a public company.


5] How to intimate RoC that the OPC has exceeded the threshold limits and require conversion into a private or a public company and What is the time limit for filing form INC-5?

The OPC shall inform RoC in form INC-5 if the threshold limit is exceeded and is required to be converted into a private or a public company. Further Form INC-5 shall be filed within sixty days of exceeding threshold limits


6] Is there any form that is to be filed for the conversion of an OPC into a private or a public company?

Form INC-6 shall be filed by an OPC for the conversion of an OPC into a private or a public company.

Yes, the private company will also file form INC-6 for converting itself into an OPC. The paid-up share capital of the private company should not be exceeding fifty lakh rupees and should not have an average annual turnover of more than two crore rupees at the time of such conversion into OPC. The company shall be having one member and shall appoint one nominee to act as a member in case of death or incapacity of the member at the time of conversion into OPC.


7]What is the time limit for filing form INC-6?

Form INC-6 shall be filed within 30 days in case of voluntary conversion and within six months of mandatory conversion.