The Companies Act, 2013, introduced the concept of One Person Company (OPC) in India. Further, this was to support entrepreneurs desiring to start a business on their own. While a Private Limited Company or Limited Liability Partnership requires at least two members for incorporation, you can start an OPC with a single member.
OPC or ‘one person company’ is defined in section 2(62) of the Companies Act, 2013 as a company that has only one person as a member. According to section 2(68) of the Act, it is the sub-domain of a private company.
• Minimum one director, one shareholder, and one nominee
• Director Identification Number (DIN) of all the Directors
• DSC or Digital Signature Certificate of all Directors and shareholders
• At least one director must be an Indian resident
• Further, the shareholder and nominee must be a natural person, an Indian citizen, and a resident of India.
Visit the official website of the Ministry of Corporate Affairs (MCA). Fill Form SPICe+ Part A to apply for the reservation of the company name.
To process the incorporation of an OPC, you must obtain a DSC for the sole promoter and the director. You will need a passport size photograph along with address and identity proof documents for the application.
The incorporation of the OPC will be the same as a private company but there is one additional document required that is consent from the nominee as prescribed in the format Form INC-3. So, readers can read the detailed information regarding the incorporation process through the previously written article-
Here, is the list of documents that are required in incorporation:
• NOC, Rent Agreement or Ownership proof and latest bill for the proposed registered office as mentioned above.
• Identity and Address Proofs of the directors, the shareholder, and also the Nominee
• Consent of the proposed director in form DIR-2.
• Consent from the nominee in Form INC-3 along with his Aadhaar Card and PAN Card.
• OPC can only be incorporated as a private limited Company.
• Before the amendment, only a natural person who is an Indian citizen and resident in India is allowed to incorporate an OPC. However, by making the amendment in sub-rule (1) of Rule 3 for words, “and resident in India”, the following words substituted “whether resident in India or otherwise”.
By this amendment, now Non-Resident Indians (‘NRIs’) are also allowed to incorporate OPCs in India.
• Residence status for the formation of OPC also undergone change, instead of stay of 182 days in India, if a person is in India for 120 days or more, in preceding FY, he can be considered as Resident in India
• OPC cannot be incorporated as an NBFC hence the formation of investment companies is otherwise also not possible. However, there is no bar in OPC’s investing in shares and securities of other companies.
• No minor can become a member or nominee in OPC or can hold shares with beneficial interest.
• The words One Person Company must be written in brackets below the name of such company.
1. Can an NRI Register a One-Person Company in India? If yes, then what are the conditions for the same?
Ans. Through the amendment in sub-rule (1) of Rule 3 for words, “and resident in India”, the following words substituted “whether resident in India or otherwise”. By this amendment, now Non-Resident Indians (‘NRIs’) are also allowed to incorporate OPCs in India.
2. How many OPC’s can one person incorporate?
Ans. A person cannot incorporate more than one OPC.
3. Is it mandatory to appoint a Nominee in case of OPC?
Ans. Yes, it is mandatory to nominate a person, at the time of incorporation with prior consent in the Form INC-3 and may at anytime withdraw his consent by giving notice to member and OPC as well.
4. What are the mandatory Annual Compliances for OPC?
Ans. For this, you can go through our previous written article, in which we provide all important compliance and privileges regarding OPC and link for the same:-
5. What are the restrictions in carrying on the activity of OPC?
Ans. The following activities are restricted by the OPC: –
• OPC cannot carry on NBFC related activities.
• OPC cannot acquire/invest in securities in its own name in another body corporate however members can invest in the shares of other body corporate.
• OPC cannot issue or allot shares to anyone except its member.
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