One Person Company
An Entrepreneur looks forward to his own company from the very first day of his career, maybe even before that. No one likes to be boss around. Now, once you have decided to incorporate a company, the question that arises is what kind of a company are you going to open. The company varies from LLP (Limited Liability Partnership) to Sole Proprietorship to Private Limited Company to Public Companies to OPC (One Person Company). Each type of company has its own advantages and disadvantages. They have different procedures and requirements for their registrations and incorporation. Talking about OPCs as the name suggests are a company which can be incorporated with only one member who acts as a director as well as the shareholder. Described below is in detail about what exactly OPCs are and what its features are.
Till thirty-first March 2014, you could have registered your private company but with a requirement of the second member, because according to Companies Act, a minimum of two shareholders was required but it turned out that many Entrepreneurs were unable to set up their private companies due to this one specific rule. To their relief, the government introduced the concept of One Person Company in India. It has simple legal procedures as compared to other companies since they have certain exemptions in comparison with private limited companies.
The company continues to function even after the death of the member who was the sole director as well as the shareholder. Here comes the concept of ‘nominee’. The sole member must choose a nominee who shall become the next director and shareholder after the former one dies or is disable to continue his duties. The nominee cannot be a minor. However, only a citizen, as well as a resident of India, is eligible to incorporate an OPC.
A maximum of fifteen directors can be appointed in an OPC and each of them must have stayed in India for more than One hundred and eighty-two days in the previous calendar year. In the case of only one director there is no rule regarding the meeting of the board and hence one more exemption can be seen here.
The minimum share capital required for the incorporation of the company is Rupees One Lakh. This company is easy to manage and a single owner has the complete control of the company. The forms are minimum and certain tax flexibility is also provided.
Unlike a sole Proprietorship, OPC is considered to be a separate legal entity making it a big hit amongst entrepreneurs especially the lone ones. The liability of OPC is limited to the value of share the company holds, therefore, it gives the Entrepreneur a chance to take more risks without any fear of losing personal assets.
Eligibility:
Only a natural person who is a citizen of India and resident in India:
(a) is eligible to incorporate an OPC
(b) is eligible to be a nominee for the sole member of an OPC.
A Resident of India is a person who has stayed in India for at least 182 days in the preceding 1 year.
Steps for Incorporation of an OPC:
Procedure for Incorporation of OPC:
An OPC can be incorporated by a physical filing of the necessary documents or they can be submitted online. The following is the procedure for physical filing:
The proposed directors must obtain a Digital Signature Certificate(DSC) from 8 authorized DSC makers.
Reservation of name: An application for the reservation of a suitable name must be made in Form No. INC-1.
In case the articles of association contain provisions for entrenchment, the company must inform the Registrar of such provisions in Form No.INC-2 at the time of incorporation of the company or in a case of existing companies (by amendment of the articles of association), the same must be filed in Form No.MGT-14 within 30 days from the date of entrenchment of the articles.
Model articles of association have been provided in Tables F, G, H, I and J of Schedule I, as are applicable, and can be adopted by a company either in totality or otherwise.
Application for incorporation of OPC: An application must be filed, with the Registrar of Companies(ROC) within whose jurisdiction the registered office of the company is proposed to be situated, in Form No.INC-2.
The signing of Memorandum and Articles of Association:
The MoA and AoA of the company must be signed by the sole member who is also the subscriber to the memorandum, who must give details of his name, address, description and occupation, if any, in the presence of at least one witness who must also attest the signature and must also sign and give his details.
Affidavit of Subscriber and the director:
The affidavit must be submitted by a sole member who has subscribed to the memorandum and named in the articles in Form No.INC-9.
Particulars of Subscriber:
The sole member must file the particulars of subscription with the Registrar at the time of incorporation.
Nomination by the sole member:
(1) The subscriber to the memorandum of a One Person Company must nominate a person, after obtaining prior written consent of such person, who shall, in the event of the subscriber’s death or his incapacity to contract, become the member of that One Person Company.
(2) The name of the person nominated shall be mentioned in the memorandum of One Person Company and such nomination in Form No INC-2 along with consent of such nominee obtained in Form No INC-3.
Declaration by professionals:
The declaration by an Advocate, a Chartered Accountant, a Cost accountant or Company Secretary in practice shall be in Form No. INC-8.
The Ministry of Corporate Affairs (MCA) has issued an integrated incorporation form INC-32. So now, an OPC can be incorporated online by filling the Simplified Proforma for Incorporating Company Electronically (SPICe) e-form in Form INC-32 (using Digital Signature Certificate of the Director)along with (eMoA) in Form INC-33 and (eAoA) in Form INC-34.
Documents required for One Person Company Registration in India
The documents required for One Person Company are as follows:
For Directors/Nominee:
Online filing of OPC by filling form INC-32 (using Digital Signature Certificate of the Director)
Identity proof, address proof and Pan Card copy of nominee and member
ID proof- Anyone (Voter ID/Aadhar Card/Driving License/Passport)
Director Identification Number
Memorandum of Association in Form INC-33
Articles of Association in Form INC-34
Registered office’s address proof- Anyone (Electricity Bill/Telephone Bill/Mobile Bill/Bank Statement)
In addition, the landlord of the registered office premises must give a No Objection Certificate for having the registered office on his/her premises and must send his/her identity proof and address proof.
Minimum authorized share capital required for One Person Company having share capital is Rs.1,00,000/-.
Minimum and maximum number of members for One Person Company is one only.
The subscriber to the Memorandum must make the payment for the total amount of shares subscribed by him to the company upon incorporation.
However, according to Companies Act, an OPC cannot be converted into a company unless two years from its incorporation but it is mandatory to convert it in a company if the annual turnover of the company crosses Rupees two crores.
One Person Company registration is also considered to be easy comparatively. We at LegalRaasta can help you with the company registration process and help incorporate your own OPC.
This article has been contributed by Simmi Setia, Content Writer at LegalRaasta, an online portal for Section 8 company registration, Nidhi company registration, IEC registration.
An Entrepreneur looks forward to his own company from the very first day of his career, maybe even before that. No one likes to be boss around. Now, once you have decided to incorporate a company, the question that arises is what kind of a company are you going to open. The company varies from LLP (Limited Liability Partnership) to Sole Proprietorship to Private Limited Company to Public Companies to OPC (One Person Company). Each type of company has its own advantages and disadvantages. They have different procedures and requirements for their registrations and incorporation. Talking about OPCs as the name suggests are a company which can be incorporated with only one member who acts as a director as well as the shareholder. Described below is in detail about what exactly OPCs are and what its features are.
Till thirty-first March 2014, you could have registered your private company but with a requirement of the second member, because according to Companies Act, a minimum of two shareholders was required but it turned out that many Entrepreneurs were unable to set up their private companies due to this one specific rule. To their relief, the government introduced the concept of One Person Company in India. It has simple legal procedures as compared to other companies since they have certain exemptions in comparison with private limited companies.
The company continues to function even after the death of the member who was the sole director as well as the shareholder. Here comes the concept of ‘nominee’. The sole member must choose a nominee who shall become the next director and shareholder after the former one dies or is disable to continue his duties. The nominee cannot be a minor. However, only a citizen, as well as a resident of India, is eligible to incorporate an OPC.
A maximum of fifteen directors can be appointed in an OPC and each of them must have stayed in India for more than One hundred and eighty-two days in the previous calendar year. In the case of only one director there is no rule regarding the meeting of the board and hence one more exemption can be seen here.
The minimum share capital required for the incorporation of the company is Rupees One Lakh. This company is easy to manage and a single owner has the complete control of the company. The forms are minimum and certain tax flexibility is also provided.
Unlike a sole Proprietorship, OPC is considered to be a separate legal entity making it a big hit amongst entrepreneurs especially the lone ones. The liability of OPC is limited to the value of share the company holds, therefore, it gives the Entrepreneur a chance to take more risks without any fear of losing personal assets.
Eligibility:
Only a natural person who is a citizen of India and resident in India:
(a) is eligible to incorporate an OPC
(b) is eligible to be a nominee for the sole member of an OPC.
A Resident of India is a person who has stayed in India for at least 182 days in the preceding 1 year.
Steps for Incorporation of an OPC:
Procedure for Incorporation of OPC:
An OPC can be incorporated by a physical filing of the necessary documents or they can be submitted online. The following is the procedure for physical filing:
The proposed directors must obtain a Digital Signature Certificate(DSC) from 8 authorized DSC makers.
Reservation of name: An application for the reservation of a suitable name must be made in Form No. INC-1.
In case the articles of association contain provisions for entrenchment, the company must inform the Registrar of such provisions in Form No.INC-2 at the time of incorporation of the company or in a case of existing companies (by amendment of the articles of association), the same must be filed in Form No.MGT-14 within 30 days from the date of entrenchment of the articles.
Model articles of association have been provided in Tables F, G, H, I and J of Schedule I, as are applicable, and can be adopted by a company either in totality or otherwise.
Application for incorporation of OPC: An application must be filed, with the Registrar of Companies(ROC) within whose jurisdiction the registered office of the company is proposed to be situated, in Form No.INC-2.
The signing of Memorandum and Articles of Association:
The MoA and AoA of the company must be signed by the sole member who is also the subscriber to the memorandum, who must give details of his name, address, description and occupation, if any, in the presence of at least one witness who must also attest the signature and must also sign and give his details.
Affidavit of Subscriber and the director:
The affidavit must be submitted by a sole member who has subscribed to the memorandum and named in the articles in Form No.INC-9.
Particulars of Subscriber:
The sole member must file the particulars of subscription with the Registrar at the time of incorporation.
Nomination by the sole member:
(1) The subscriber to the memorandum of a One Person Company must nominate a person, after obtaining prior written consent of such person, who shall, in the event of the subscriber’s death or his incapacity to contract, become the member of that One Person Company.
(2) The name of the person nominated shall be mentioned in the memorandum of One Person Company and such nomination in Form No INC-2 along with consent of such nominee obtained in Form No INC-3.
Declaration by professionals:
The declaration by an Advocate, a Chartered Accountant, a Cost accountant or Company Secretary in practice shall be in Form No. INC-8.
The Ministry of Corporate Affairs (MCA) has issued an integrated incorporation form INC-32. So now, an OPC can be incorporated online by filling the Simplified Proforma for Incorporating Company Electronically (SPICe) e-form in Form INC-32 (using Digital Signature Certificate of the Director)along with (eMoA) in Form INC-33 and (eAoA) in Form INC-34.
Documents required for One Person Company Registration in India
The documents required for One Person Company are as follows:
For Directors/Nominee:
Online filing of OPC by filling form INC-32 (using Digital Signature Certificate of the Director)
Identity proof, address proof and Pan Card copy of nominee and member
ID proof- Anyone (Voter ID/Aadhar Card/Driving License/Passport)
Director Identification Number
Memorandum of Association in Form INC-33
Articles of Association in Form INC-34
Registered office’s address proof- Anyone (Electricity Bill/Telephone Bill/Mobile Bill/Bank Statement)
In addition, the landlord of the registered office premises must give a No Objection Certificate for having the registered office on his/her premises and must send his/her identity proof and address proof.
Minimum authorized share capital required for One Person Company having share capital is Rs.1,00,000/-.
Minimum and maximum number of members for One Person Company is one only.
The subscriber to the Memorandum must make the payment for the total amount of shares subscribed by him to the company upon incorporation.
However, according to Companies Act, an OPC cannot be converted into a company unless two years from its incorporation but it is mandatory to convert it in a company if the annual turnover of the company crosses Rupees two crores.
One Person Company registration is also considered to be easy comparatively. We at LegalRaasta can help you with the company registration process and help incorporate your own OPC.
This article has been contributed by Simmi Setia, Content Writer at LegalRaasta, an online portal for Section 8 company registration, Nidhi company registration, IEC registration.
