The One Person Company (OPC) is a newly incorporated type of company that was introduced in the Companies Act, 2013 to support entrepreneurs who on their own are capable of starting a venture by allowing them to create a single person economic entity. There can be only one, natural person resident of India who can be the member of OPC. As the name itself suggests it is a company which is owned by one single person.
SECTION APPLICABLE: Section 3 of Companies Act, 2013
RULES APPLICABLE: Rule 3 and 4 of Companies (Incorporation) Rules, 2014
PRELIMINARY CONDITIONS (As per Rule 3 of Companies (Incorporation) Rules, 2014)
- Only a natural person who is an Indian citizen and resident in India can be member and nominee of an OPC.
- A natural person shall not be a member and nominee of more than a One Person Company at any point of time.
- No minor shall become member or nominee of the One Person Company or can hold share with beneficial interest in such OPC.
- Such Company cannot be incorporated or converted into a company under section 8 (Company with Charitable Objects) of the Act.
- Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any other body corporate.
- No such company can convert voluntarily into any kind of company unless two years is expired from the date of incorporation of One Person Company except in the case if its falls under the mandatory conversion criteria.
- Company shall state word ‘OPC’ in the bracket after the name of the Company, like XYZ (OPC) Private Limited.
Procedure for Incorporation of One Person Company (OPC)
| S. No. | Particulars |
| 1. | Obtain digital signature of the proposed member and OPC. |
| 2. | Name approval of the Company via RUN – In accordance with Rule 9 of the Companies (Incorporation) Rules, 2014, an application for reservation of name shall be made by using Form RUN (Reserve Unique Name) along with fee of Rs. 1000/-. Log in into MCA and reservation of name can be done by filing in a simple pro forma.
There are no attachments required to be mandatorily attached while filing in RUN however, it is recommended to draft a submission letter explaining therein the business objects of the proposed Company. It is to be noted that reservation of name and application for DIN are available with the Form No. INC. 32 also |
| 3. | The name if allotted shall be valid for a period of 20 days. |
| 4. | Form No.lNC-32 (SPICe) – For Incorporation Form INC. 32 is to be filed with the Registrar along with the following attachments:
It is to be noted that the details as required shall be filled in Form INC-3 and after check form, take the print out of the form and sign it. The same is required to be enclosed as attachment in eForm INC 32 (SPICe). |
| 5. | File Form SPICe MOA and Form SPICe AOA with the Registrar pursuant to section 4 and 5 of Companies Act, 2013 respectively. Further, the MOA of an OPC shall contain an additional clause i.e. nominee clause.
No attachments required. |
| 6. | After all the requirements, ROC shall issue a certificate of incorporation in Form No. INC-11. |
OTHER IMPORTANT POINT ABOUT MANAGEMENT OF OPCs:
- 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 private or public company.
- 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.
- The provision of holding of Annual General Meeting is not applicable to OPC
- The OPC is required to hold minimum two Board meeting during a calendar year and one meeting in each half of the calendar year and gap between two meetings is not more than 90 days.
- For the purposes of quorum, in case of a single Director, it shall be sufficient if the passed resolutions is entered in the minutes book and signed and dated by such director.
FREQUENTLY ASKED QUESTION (FAQs) ON OPC
1. Can there be more than one Director in an OPC?
The minimum number of Directors required to form an OPC is one. However, there can be more than one up to 15 Directors. Please note that the restriction is on number of members and not Directors.
2. What if the existing single member dies?
The nominee appointed by the member shall become the member then.
3. What if the nominee of the OPC die or the member wants to change the name of nominee at any given point of time?
The OPC and the member can at any time can change the name of the nominee of the OPC by following the procedure laid down in provisions of Rule 4 of the Companies (Incorporation) Rules, 2014. However, it is important to note that even the nominee can withdraw his consent at any time.
4. On interpretation of the law, it is stated that a single person can hold the position of member and nominee of a single OPC only. What if a situation arises when the nominee becomes member of the OPC when the member dies and along with it he is also the member of his own OPC?
In the given situation, the single person becomes member of two OPCs at the same time by virtue of circumstances and not voluntarily. In such a case, he shall meet the criteria as specified in the law within a period of 180 days.
{The author i.e. Kajal Goyal is a Company Secretary in Practice at Kajal Goyal and Associates and can be reached at (M) 9999952595 and (E) [email protected]}
Author Bio
Comment for Resubmission: LEGIBLE INC 3, physically signed by nominee should be provided as per section 3(1) of
the Companies Act, 2013
Legible INC-3: means it may not contain Signature of Nominee of INC-3
physically signed by nominee: where it should be provided as attachment