Summarised Provisions Relating To One Person Companies (OPC) Under Companies Act, 2013
1. FORMATION OF COMPANY
One Person Company means a company which has only one person as a member.
(b) Formation of company
It may be formed for any lawful purpose by one person as a private company by subscribing his name to a memorandum and complying which the requirements of this act in respect of registration.
(c) Person becoming member after subscriber death or incapacity to contract
(i) The memorandum of One Person Company shall indicate the name of the other person, with his prior written consent in the prescribed form, who shall, in the event of the subscriber’s death or his incapacity to contract become the member of the company and the written consent of such person shall also be filed with the Registrar at the time of incorporation of the One Person Company along with its memorandum and articles.
(ii) Such other person may withdraw his consent in such manner as may be prescribed.
(iii) The member of One Person Company may at any time change the name of such other person by giving notice in such manner as may be prescribed.
(iv) the member of One Person Company to intimate the company the change, if any, in the name of the other person nominated by him by indicating in the memorandum or otherwise within such time and in such manner as may be prescribed, and the company shall intimate the Registrar any such change within such time and in such manner as may be prescribed.
Any such change in the name of the person shall not be deemed to be an alteration of the memorandum.
(d) Paras 7 and 8 of Table A/ Table B/Table E, Paras 6 and 7 of Table D and Paras 8 and9 of Table C shall apply to MOA of OPC
Para 6 of Table A/Table B/Table E, Para 7 of Table C and Para 5 of Table D shall not apply to MOA of OPC.
(e) Types of OPCs
One person company may be
(a) A company limited by shares or
(b) A company limited by guarantee or
(c) An unlimited company
Thus, OPC may be of the following 5 types
(i) One person company (OPC) limited by shares
(ii) OPC limited by guarantee and having share capital
(iii) OPC limited by guarantee and having no share capital
(iv) OPC unlimited having share capital
(v) OPC unlimited not having share capital
(f) Memorandum of association
The memorandum shall state
(a) The name of the company with the last word “Limited” in the case of a public limited company, or the last words “Private Limited” in the case of a private limited company.
(b) The State in which the registered office of the company is to be situated.
(c) The objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance thereof.
(d) The liability of members of the company, whether limited or unlimited with detail as specified in section 4(1)(d).
(e) The amount of share capital with which the company is to be registered and the division thereof as specified in section 4(1)(e)(i).
(f) The number of shares which the subscribers to the memorandum agree to subscribe which shall not be less than one share.
(g) The number of shares each subscriber to the memorandum intends to take indicated opposite his name.
(h) In the case of One Person Company, the name of the person who, in the event of death of the subscriber, shall become the member of the company.
2. MANAGEMENT AND ADMINISTRATION
(a) OPC is not required to hold annual general meeting.
(b) The following provisions are not applicable to OPC: Provisions of section 98 and sections 100 to111 (both inclusive) shall not apply to the company:
|98 Power of Tribunal to call general meetings other than an annual general meeting of members|
|100 Calling of extraordinary general meeting|
|101 notice of general meeting|
|102 Explanatory statement annexed to the notice of general meeting|
|103 Quorum for general meetings|
|104 Chairman of the general meetings|
|105 Provisions relating to proxies|
|106 Restrictions on voting rights|
|107 Voting by show of hands|
|108 Voting through electronic means|
|109 Demand for poll|
|110 Postal ballot|
|111 Circulation of members’ resolutions|
(c) Deemed passing of ordinary or special resolution by entry in minute’s book
For the purposes of section 114, any business which is required to be transacted at an annual general meeting or other general meeting of a company by means of an ordinary or special resolution:
(i) It shall be sufficient if, in case of One Person Company, the resolution is communicated by the member to the company and
(ii) Such resolution are entered in the minutes-book required to be maintained under section 118 and signed and dated by the member and
(ii) Such date shall be deemed to be the date of the meeting for all the purposes under this Act.
(d) Deemed passing of resolution of Board of Directors – Entry in minutes book
Where there is only one director on the board of directors of a one Person Company, any business which is required to be transacted at the meeting of the Board of Directors of a company, it shall be sufficient if, in case of such One Person Company, the resolution by such director is entered in the minutes-book required to be maintained under section 118 and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors for all the purposes under this Act.
3. ACCOUNTS OF COMPANIES
(a) Signing of Financial Statement
The financial statement shall be signed only by one director for submission to the auditor for his report thereon.
(b)Report of Board of Directors
The report of Board of Directors means a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.
(c) Signing of the Board’s Report
The Board’s report and any annexure thereto shall be signed by its chairperson of the company if he is authorized by the Board and where he is not so authorized, shall be signed by at least two directors, one of whom shall be a managing director or by the director where there is one director.
(d) Filing of copy of financial statement
One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year.
4. AUDIT AND AUDITORS
Compulsory rotation of auditors – Not applicable
Provision for compulsory rotation of auditor in section 139(2) are not applicable to OPC as they apply to listed companies and companies belong to such class or classes as may be prescribed (unless central govt. applies it to OPCs through notification).
(a) Number of Directors
The company shall have a minimum one director and maximum of fifteen directors such directors being individuals.
The company may appoint more than fifteen directors after passing a special resolution.
(b) One director to be resident director
The company shall have at least one director who has stayed in India for a total period of not less than one hundred and eighty-two days in the previous calendar year.
(c) First Director
Where the first director is not appointed by the articles in case of a One Person Company, an individual being member shall be deemed to be its first director until the director or directors are duly appointed by the member.
(d) Meeting of the Board of Directors
If OPC has more than one director on its Board, the company shall be deemed to have complied with the provisions of section 173 if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days. If OPC has only one director, it is exempted from holding Board meetings.
(e) Contract with the sole member
Where One Person Company 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 company shall, unless the contract is in writing, ensure that the terms of the contract or offer are contained in a memorandum or are recorded in the minutes of the first meeting of the Board of Directors of the company held next after entering into contract.
The provision of section 193(1) shall not apply to contracts entered into by the company in ordinary course of its business.
(f) To inform the registrar about the contracts
The company shall inform the Registrar about every contract entered into by the company and recorded in the minutes of the meeting of its Board of Directors under section 193(1) within a period of fifteen days of the date of approval by the Board of Directors.
Articles II (27), II (48) and II (76) especially apply to OPCs
These articles especially apply to companies having share capital.
Contributed by Ashish Mishra, CA Final student of ICAI and a trainee at KGMA (www.kgma.in). For any queries or suggestions mail at [email protected]