Quick Insight on One Person Company (OPC)

ACS Priya Garg

The concept of One Person Company [OPC] is a new introduction in the companies act 2013 which allows a sole person to incorporate a company on its own with concessional/relaxed requirements under the Act.

Definition of OPC

As per  Section 2(62) of the Companies Act, 2013 One Person Company” means a company which has only one person as a member;

Sections/Regulations/Rules/Schedule applicable to OPC

1.Section 2(62) of the Companies Act, 2013

2.Companies (Incorporation) Rules, 2014.

3. Schedule 1 of companies act 2013

Restriction on OPC

1..Only a natural person who is an Indian citizen and resident in India-

 (a) shall be eligible to incorporate a One Person Company;

 (b) shall be a nominee

2.No person shall be eligible to incorporate more than a One Person Company or become nominee in more than one such company.

3. Where a natural person, being member in One Person Company in accordance with this rule becomes a member in another such Company by virtue of his being a nominee in that One Person Company, such person shall meet the eligibility criteria specified in point (2) within a period of one hundred and eighty days.

(4) No minor shall become member or nominee of the One Person Company or can hold share with beneficial interest

(5) Such Company cannot be incorporated or converted into a company under section 8 of the Act.

(6) Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporates.

 (7) No such company can convert voluntarily into any kind of company unless two years have expired from the date of incorporation of One Person Company, except threshold limit (paid up share capital) is increased beyond fifty lakh rupees or its average annual turnover during the relevant period exceeds two crore rupees.

Requirements of incorporating a OPC

a.A person having din to become shareholder and director of company

b.A nominee who shall become the shareholder in case of death/incapacity of the original shareholder.

Steps to Incorporate One Person Company (OPC)

1.Obtain Digital Signature Certificate [DSC] for the proposed Director(s).

2.Obtain Director Identification Number [DIN] for the proposed director(s).

3.Apply for name approval in INC 1 with the word OPC in name

4.After name approval file for incorporation in INC 2/INC 7

Documents required to be attached in INC 2/INC 7

a.MOA and AOA

b.INC 8 INC 9

c. INC 3 should be attached as scanned document

c.DIR 2

d.pan card id proof residential proof

e utility bill and NOC for registered office address

All documents to be attached as per companies incorporation rules 2014

Some Important Points

• Authorised and subscribed capital should be same in opc
• Opc cannot do the object of finance or investment related services
• No person shall be eligible to incorporate more than a One Person Company or become nominee in more than one such company.

Penalty.- 

If One Person Company or any officer of such company contravenes the provisions of the rules, One Person Company or any officer of the One Person Company shall be punishable with fine which may extend to ten thousand rupees and with a further fine which may extend to one thousand rupees for every day after the first during which such contravention continues.

Now OPC can be formed in spice form too where name can be applied with relevant documents.