ONE
PERSON COMPANY (OPC)
INTRODUCTION
The introduction of OPC in the legal
system is a move that would encourage corporatization of micro businesses and
entrepreneurship with a simpler legal regime so that the small entrepreneur is
not compelled to devote considerable time, energy and resources on complex
legal compliances. This will not only enable individual capabilities to
contribute economic growth, but also generate employment opportunity. One
Person Company of sole-proprietor and company form of business has been
provided with concessional /relaxed requirements under the Companies Act;
2013.With the implementation of the Companies Act, 2013, a single national
person can constitute a Company, under the One Person Company (OPC) concept.
DEFINITION
As per provision of section 2(62) of
the Companies Act, 2013 defined (62) “one person company” means a company which
has only one person as member.
FORMATION OF OPC [Rule 3]
·
Only a natural person who is an
Indian citizen and resident in India-
– shall be eligible to
incorporate a One Person Company;
– shall be a nominee for
the sole member of a One Person Company.
The term “resident in India” means a person who has stayed
in India for a period of not less 182 days immediately proceeding
one calendar year.
STAGES OF INCORPORATION OF OPC
·
Name reservation: Form
INC-1 shall be filed for name availability.
·
Incorporate OPC: After
name approval, form INC-2 shall be filed for incorporation of the OPC within 60
days of filing form INC-1.
·
Form DIR-12 shall be filed along
with (linked) form INC-2 except when promoter is the sole director of the OPC.
·
The company shall file form INC-22
within 30 days once form INC-2 is registered in case the address of
correspondence and registered office address are not same.
SALIENT FEATURES OF OPC
·
One person cannot incorporate more
than one OPC or become nominee in more than one OPC.
·
No minor shall become member or
nominee of the One Person Company or hold share with beneficial interest.
·
No such company can convert
voluntarily into any kind of company unless 2 years have expired from the date
of incorporation, except in cases where capital or turnover threshold limits
are reached.
·
It must have only one member at any
point of time and may have only one director.
PRIVILEGES AVAILABLE TO OPC
·
The most significant reason for
shareholders to incorporate the ‘single-person company’ is certainly the desire
for the limited liability.
·
Businesses currently run under the
proprietorship model could get converted into OPCs without any difficulty.
·
Mandatory rotation of auditor after
expiry of maximum term is not applicable.
·
One Person Company needs to have
minimum of one director. It can have directors up to a maximum of 15 which can
also be increased by passing a special resolution as in case of any other
company.
·
The provisions of Section 98 and
Sections 100 to
111 (both inclusive), relating to holding of general meetings, shall not apply
to a One Person Company.
·
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.
PROHIBITED ACTIVITIES
·
Such Company cannot be incorporate
or converted into a company under section 8 of the Act.
·
Such Company cannot carry out
Non-Banking Financial Investment activities including investment in securities
of anybody corporate.
ONE PERSON COMPANY TO CONVERT ITSELF
INTO A PUBLIC COMPANY OR A PRIVATE COMPANY IN CERTAIN CASES (RULE 6)
1. Compulsory conversion of OPC
·
Where the paid up share capital of
an One Person Company exceeds Rs. 50 lacs or its average annual turnover
exceeds Rs. 2 crores immediately preceding three consecutive financial year;
·
Such OPC shall required to convert
itself, into either private company or public company in accordance with the
provision of section 18 of the Act within 6 month of the date as mention above.
·
The OPC shall alter its memorandum
and articles by passing a resolution in accordance with section 122(3) of the
Act to give effect to the conversion and to make necessary changes incidental
thereto;
·
The OPC shall within period of sixty
days from the date of applicability of above provisions, give a notice
to the Registrar in Form No. INC. 5informing that it has ceased to
be a OPC and that it is now required to convert itself into a private company
by virtue of its paid up share capital or average annual turnover, having
exceeded the threshold limit laid down above.
2. Voluntary conversion of OPC
·
A One Person Company can get itself
converted into a Private or Public company after increasing the minimum number
of members and directors to two or minimum of seven members and two or three
directors as the case may be, and by maintaining the minimum paid up capital as
per requirements of the Act for such class of company and by making due
compliance of section 18 of the Act for conversion.
CONVERSION OF PRIVATE COMPANY INTO
ONE PERSON COMPANY [RULE 7]
·
A Private company other than a
company registered under section 8 of the Act having paid up share capital upto
Rs. 50 lacs or average annual turnover during the relevant period upto Rs. 2
crore may convert itself into One Person Company by passing a special
resolution in general meeting.
·
Before passing such resolution the
company shall obtain No Objection in writing from members and creditors.
·
The one person company shall file
copy of the special resolution with the Registrar of companies (ROC) within 30
days from the date of passing such resolution in Form No. MGT 14.
·
The Company shall file an
application in Form No. INC. 6 for its conversion into One
Person Company along with fees specified, by attaching following documents,
namely:-
–
the directors of the company shall give a declaration by way of affidavit duly
sworn in confirming that all members and creditors of the company have given
their consent for conversion, the paid up share capital of the company is Rs.
50 lacs or less or average annual turnover is less than Rs. 2 crore or less, as
the case may be;
–
the list of members and list of creditors;
–
the latest Audited Balance Sheet and the Profit and Loss Account; and
–
the copy of No Objection letter of secured creditors.
·
On being satisfied and compiled with
requirements stated herein the Registrar shall issue the Certificate.
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