All about One Person Company – Incorporation [OPC- Part- 2]

For Introduction of OPC please refer the following link: All about One Person Company – Introduction [OPC- Part 1]

NATURE OF OPC:

An OPC by its very nature is a Private Company. This is established by the definition of Private Company-Section 2(68) of Companies Act, 2013 and Section 3- Formation of a Company-

Definition of Private Company-Section 2(68) of Companies Act, 2013

“Private Company” means a company having a minimum paid-up share capital as may be prescribed, and which by its articles,

(i) restricts the right to transfer its shares;

(ii) except in case of One Person Company, limits the number of its members to two hundred:

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:

Provided further that—

(A) persons who are in the employment of the company; and

(B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and

(iii) prohibits any invitation to the public to subscribe for any securities of the company;

Section 3: Formation of a Company:

(1) A company may be formed for any lawful purpose by—

(a) seven or more persons, where the company to be formed is to be a public company;

(b) two or more persons, where the company to be formed is to be a private company; or

(c) one person, where the company to be formed is to be One Person Company that is to say, a private company,

by subscribing their names or his name to a memorandum and complying with the requirements of this Act in respect of registration.

Provided that 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.

Thus, it concludes that OPC is a Private Company by its very nature.

LEGAL PROVISIONS RELATING TO AN OPC:

Legal Provisions relating to incorporation of an OPC are same as that of any Public or Private company i.e., Section 7, 8(1), 12, 152 and 153 of the Companies Act, 2013 read with rules.

Rule 38 read with Rule 38A of Companies (Incorporation)Rules,2014: An application for incorporation for the company shall be made in Simplified Proforma for Incorporating Company Electronically (SPICE+) (Form INC-32) along with Form AGILE PRO S (Form INC-35).

PROCEDURE FOR INCORPORATION OF OPC:

The procedure of Incorporation of a OPC is similar to any Public or Private Company. Following is the procedure for incorporation of an OPC:

STEP 1: PART A – NAME RESERVATION

1. At first the applicant shall reserve the name of OPC in Part A of SPICE+ (Form INC-32).

2. Name of the Company can be applied by using the ‘SPICe+’ utility on MCA portal under ‘MCA SERVICES’ (right under the ‘Company Services’). One can proceed by clicking on the ‘New Application’ and filing in SPICe+ Part A. After that you can either just apply for ‘Name Reservation’ or proceed with ‘Company Incorporation’.

3. If you apply for name reservation, you will have to make payment for the same and incorporation process could be started only once the name is approved by CRC. Two name suggestions can be provided for name reservation in the order of preference in this case.

4. If you wish to proceed with Incorporation simultaneously, you can just give one name for reservation.

5. Applicant has to provide the following details of the proposed company:

6. Type of Company- Private (OPC)

7. The remaining details-Class of Company, Category of Company and Sub-Category of Company is auto-filed except Main division of industrial activity of the Company which is to be filed as per the purpose for which the company is being incorporated.

8. Summary of the objects to be pursued by the company on its incorporation

9. Note: You may include a document that supports your name reservation. However, it would be mandatory to attach relevant documents and No Objection Certificates (NOCs) in Part A of SPICe+ only when a name which requires the approval of a Sectoral Regulator or NoC etc. if applicable, as per the Companies (Incorporation) Rules, 2014, is being applied for.

Please note that only one file is allowed to be uploaded as an attachment and the size of the file should not exceed 6MB in case of Part A SPICe+ and overall limit of form size shall not exceed 6MB in case both Part A SPICe+ and Part B SPICe+ are filed together.

In case of multiple attachments for Part A SPICe+, please scan all documents into a single file and upload the same.

Two proposed names are to be given in the order of preference.

Note: Auto check facility is provided where the applicant can verify whether the proposed name is available or not.

During submission of application, applicant shall have 2 options:

Option 1: Submit for reservation of name. In this case, applicant shall have a total of 2 resubmissions- one for Part A (name reservation) and one for Part B (Incorporation)

Option 2: Submit for Incorporation. In this case, applicant shall have only one resubmissions ie., at the time of incorporation of the company (Part-B).

The name shall be approved at the discretion of Central Registration Center if it is neither undesirable nor resembles closely to an existing name or registered trademark.

However, if the same is not approved, the applicant shall be given two opportunities (resubmissions) to change the name.

STEP 2:  PART B – INCORPORATION OF COMPANY:

1. Requirement of Digital Signature Certificate:

Before incorporation it is mandatory for subscriber and the proposed director to have their digital signature.

2. The applicant shall fill information in Part B, attach documents and submit the same. After submitting Part B, Form AGILE PRO S, Form INC-33(eMOA) and Form INC-34(eAOA) shall be available for filing.

3. Form INC-9 shall be auto-filled on the basics of above forms.

Following points must be noted while preparing SPICe+ forms: –

1. Interpretation clause of Articles of Association (AOA) to be modified to contain the definition of OPC

2. Other important clauses in AOA related to Share capital, transfer and transmission of shares, proceedings of General Meetings, etc should also be modified or removed according to the provisions applicable to OPC.

STEP 3: Signing of various forms:

1. Download all the forms and affix Digital Signature Certificate.

2. Part B of SPICE+ is to be signed by any First Director and a Practicing professional making declaration regarding compliance of the provisions of the Act.

3. eMOA is to be signed by the subscriber and the Practicing professional.

4. eMOA is to be signed by the subscriber and the Practicing professional.

5. Form AGILE PRO S (INC-35) is to be signed by any First Director.

6. Form INC-9 is an auto-filled form and is to be signed by Subscribers and First Director(s).

STEP 4: Uploading of Forms:

After signing of all the form, one should confirm that the size of all the forms is within 6MB and then upload the forms in the following order:

i. Part B of SPICE+

ii. eMOA

iii. eAOA

iv. AGILE PRO S

v. INC-9

FAQs:

Q.1 How many directors can an OPC have?

Ans. Section 149- A company can have a maximum of 15 directors. However, it may increase its number of directors after passing a special resolution.

Q.2 Can the director and subscriber be the same person?

Ans. Yes. Director and Subscriber may be the same person.

Q.3 What are the documents prepared for incorporation of OPC?

Ans. Following documents are required to be prepared/obtained for OPC incorporation:

1. Proof of Registered Office:

If the premise where Registered office of the company is  to be situated is owned- Latest copy of Utility Bill (not older than 2 months) in  the  name of the company.

If the premise where Registered office of the company is to be situated is Rented – Rent Agreement along with No objection letter along with latest copy of Utility Bill (not older than 2 months).

2. DIR-2 of First Director(s)

3. Identity and Address proofs of member, nominee and director

4. Interest in other entity of director(s).

5. Consent of the Nominee is to be obtained in Form INC-3 (which can be downloaded from MCA portal) and it shall be signed and attached along with Id and address proofs of the nominee.

6. Declaration to be made by first director(s), members and subscribers at the time of incorporation of the company in relation to deposits.

Disclaimer: The above views are the personal views of the author and the Readers are requested to exercise their due diligence & take professional advice before taking any action.