One Person Company (OPC)

The One Person Company signifies the form of a Company that can be formed with just one Director and a Member as against a Private Limited Company, which requires at least two directors and two members and a Public Company that requires at least three directors and seven members. The compliance requirement and consequent expenses are significantly reduced, if a person forms a One Person Company instead of a Private Limited or Public Company.

Other important features of One Person Company are-

  • It is a type of a Private Limited Company and just like any other company, it provides the benefit of separate legal existence and limited liability.
  • Nominee to be nominated at the time of incorporation who shall become the member of OPC in the event of death of subscriber/member of the company or his incapacity to contract.

          The sole member may change the nominee anytime after incorporation for any reason whatsoever. Consent of the nominee may also be withdrawn by the nominee anytime, in which case the member will have to nominate the person as nominee within 15 days of such notice of withdrawal.

  • It can have minimum 1 and maximum 15 directors
  • Threshold Limits: The OPC will have to be converted in to Private or Public Company if its Paid up-Share Capital exceeds Rs. 50 Lacs/- or its average annual turnover of immediately preceding three consecutive financial years exceeds Rs. 2 Crores/-
  • OPC can be voluntarily converted in to Private or Public company only after 2 years of incorporation.

Definition of OPC as per Companies Act, 2013

Section 2(62) of the Company’s Act 2013 defines OPC as follows;

“One Person Company” means a company which has only one person as a member.”

OPC Incorporation pre-requisites

We are all aware that MCA vide its notification dated 18th February, 2020, has already stationed a New Web-based Form ‘SPICe+’ (‘SPICe Plus’) in place of existing SPICe forms, owing to the ‘Ease of Doing Business’ Initiative of Government of India, therefore, now OPC can also be incorporated using the same utility on MCA portal.

Following are certain important points which must be adhered to before proceeding with OPC Incorporation-

  • Such Company cannot be incorporated or converted into a Section 8 Company
  • An OPC cannot carry out NBFC (Non-Banking Financial Company) related activities and neither can it acquire or invest in securities of anybody corporate or issue or allot shares to anyone except its member
  • A person can become member or nominee of only one OPC at a time.
  • Only a natural person who is an Indian citizen and resident in Indian can become member and nominee in OPC. This means Legal entities such as Company, society, LLP, etc cannot form an OPC
  • A minor cannot become member or nominee of OPC

Incorporation Process

  • Digital Signature Certificate (DSC)
  • Name Reservation
  • Documents Required
  • Form Filing and DIN application
  • Issue of Certificate of Incorporation (COI), PAN and TAN

Digital Signature Certificate- DSC of member is required to be obtained before proceeding with incorporation. Following documents/ Information are required for processing DSC application:

1. Passport size Photograph

2. Copy of PAN and Aadhaar Card

3. Email Id and Phone no.

Name Reservation- Name of the Company can 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’.

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 this case.

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

The name of the company should have ‘(OPC) Private Limited’ as suffix. Example- XYZ (OPC) Private Limited, where XYZ is the trade / brand name of the Company.

Documents Preparation- Following documents are required to be prepared/obtained for OPC incorporation:

1. Latest copy of Utility Bill (not older than 2 months) where the registered office of the Company is to be situated along with NOC from the owner.

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

Form Filing- DIN(s) of the subscriber and directors, if not available, could be applied at the time of filing the forms.

Proceed with filling up of details in SPICe+ Part B. All the attachments along with above Form INC-3 will be uploaded here. Once SPICe+ Part B is submitted, other forms viz., AGILE-PRO, SPICe+ AoA and SPICe+ MoA will also become available for filling up the details. INC-9 will be auto-generated on the basis information filled in SPICe+ Part B.

After submitting all the forms successfully, these can be downloaded and DSC can be affixed wherever required. Then the above forms can be uploaded in following sequence-

1. SPICe+ Part B

2. SPICe+ MoA

3. SPICe+ AoA

4. AGILE-PRO

5. INC-9

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.

Note- Provisions of following sections shall not be applicable to OPC, thereby shrinking the compliance requirement as compared to Private Limited Company:

Section 96 Annual General Meeting
Section 98 Power of Tribunal to call meetings of members
Section 100 Calling of extraordinary general meeting
Section 101 Notice of meeting
Section 102 Statement to be annexed to notice
Section 103 Quorum for meetings
Section 104 Chairman of meetings
Section 105 Proxies
Section 106 Restriction on voting rights
Section 107 Voting by show of hands
Section 108 Voting through electronic means
Section 109 Demand for poll
Section 110 Postal ballot
Section 111 Circulation of members’ resolution

Disclaimer: The information provided above is for general informational purposes only in good faith. The content of the above article has been drawn with utmost care and diligence on the basis of applicable provisions and procedures. Efforts have been made to provide accurate, adequate and complete information with no responsibility of the author whatsoever.

Author Bio

Qualification: CS
Company: Srishti Singh & Associates
Location: DELHI, New Delhi, IN
Member Since: 10 Dec 2019 | Total Posts: 1

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