Opc compliances

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15.04.2014

15.04.2014

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  • 1. Presented By: - Shalu Saraf CS Trainee
  • 2. One person Company General Meaning:- One Person Company (OPC) is a new type of business structure in India, introduced through the Companies Act, 2013. One Person Company is a hybrid between a Private Limited Company and Proprietorship, providing a single entrepreneur with a host of features only available for an association of people. Definition as per companies act, 2013 sec.2 (62):- “One Person Company” means a company which has only one person as a member; One person Company as per Rule 3 of Chapter 2:- (1) Only a natural person who is an Indian citizen and resident in India- (a) Shall be eligible to incorporate an OPC (but not more than one); (b) Shall be a nominee for the sole member of an OPC (but not more than one). (2)A member in OPC by virtue of his being nominee in another OPC becomes Member of such company; he/she have to meet above compliance in 180 days i.e. A natural person can be a member only in one OPC. Member in One OPC Member of another OPC Died Nominee in another OPC Natural Person By virtue of nomination, he becomes member of another OPC Now he has to decide which company’s membership he will continue in 180 days. Because A Natural Person is eligible to one OPC only. Decision Time Ineligibility Criteria of OPC:- - No minor can become member & nominee; - Cannot incorporated or converted into sec. 8 company; - Cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate. - Cannot converted voluntarily into any company unless 2 years have expired from the date of incorporation except threshold limit increased upto 50 lakh or avg. annual turnover increased upto 2 cr. "Resident in India" means a person who has stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.
  • 3. One person Company Incorporating a One Person Company in India is very similar to the incorporation of a Private Limited Company. A one person company may be formed for any lawful purpose by one person. Compliances for formation:- 1. Verification of applicant for application for DIN in form DIR 4. 2. Application for allotment of DIN in form DIR 3 to ROC. Steps for Applying DIN.docx 3. Application in form INC 1 to ROC for reservation of name set out in Application as:- (a) The name of the proposed company; or (b) The name to which the company proposes to change its name. Sec. 4(4) *** Name of Company According to Rule 8 of Chapter II. Rule 8 chapte 2 undesirable name.docx Formation of Company Sub-Sec. 5 of Sec. 4:- 1. Upon receipt of an application, the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of sixty days from the date of the application. 2. Where after reservation of name, it is found that name was applied by furnishing wrong or incorrect information, then,— a) If company has not been incorporated: Reserved name shall be cancelled & Applicant liable to penalty which extendable to Rs. 1 lakh. b) If the company has been incorporated, the Registrar may, after giving the company an opportunity of being heard— (i) Either directs the company to change its name within a period of 3 months, after passing an ordinary resolution; (ii) take action for striking off the name of the company from the register of companies; or (iii) Make a petition for winding up of the company. OPC is required to specifically mention the word “one person company” below the name wherever it is used
  • 4. One person Company 4. Preparation of Model MOA & Model AOA as per Schedule I may be adopted by a company as may be applicable to the case of the company, either in totality or otherwise. (Rule 11, Chapter II) 5. Nomination by the subscriber or member of One Person Company: - (Rule 4, Chapter II & Sec. 3 of the Act) - Nomination in Form No INC.2 along with consent of such nominee obtained in Form No INC.3 - If Nominee withdraw his/ her Consent:- 1. The person withdraw his consent by giving a notice in writing to such sole member and to the OPC: Provided that the sole member shall nominate another person as nominee within 15 days of the receipt of the notice of withdrawal and shall send an intimation of such nomination in writing to the Company, along with the written consent of such other person so nominated in Form No.INC.3. 2. The company shall within 30 days of receipt of the notice of withdrawal of consent file with the Registrar, a notice of such withdrawal of consent and the intimation of the name of another person nominated by the sole member in Form No INC.4 along with fee as provided and the written consent of such another person so nominated in Form No.INC.3. - The subscriber or member of a OPC may, by intimation in writing to the company, change the name of the person nominated by him at any time for any reason including in case of death or incapacity to contract of nominee and nominate another person after obtaining the prior consent of such another person in Form No INC.3: Provided that the company shall, on the receipt of such intimation, file with the Registrar, a notice of such change in Form No INC.4 along with fee as and with the written consent of the new nominee in Form No.INC.3 within 30 days of receipt of intimation of the change. - Where the sole member of OPC ceases to be the member in the event of death or incapacity to contract and his nominee becomes the member of such OPC, such new member shall nominate within 15 days of becoming member, a person who shall in the event of his death or his incapacity to contract become the member of such company, and the company shall file with the Registrar an intimation of such cessation and nomination in Form No INC.4 along with the fee as provided within 30 days of the change in membership and with the prior written consent of the person so nominated in Form No.INC.3.
  • 5. One person Company 6. Application with the Registrar within whose jurisdiction the registered office of the company is proposed to be situated, in Form No.INC.2 (Rule 12, Chapter II) Attachments:- - *MOA, - *AOA, - *Proof of identity of the member and the nominee, - *Residential proof of the member and the nominee, - *Copy of PAN card of member and nominee - *Consent of Nominee in Form NO. INC-3 - *Affidavit from the subscriber and first Director to the memorandum in Form NO. INC-9 - List of all the companies (specifying their CIN) having the same registered office address, if any; - Specimen Signature in Form NO. INC-10 Penalty (Rule 5, Chapter II) If OPC or any officer of such company contravenes the provisions of these rules, OPC or any officer of the OPC shall be punishable with fine which may extend to Rs. 10,000 and with a further fine which may extend to Rs. 1000 for every day after the first during which such contravention continues. Other Information for filing of documents with Registrar:- (a) The memorandum and articles of the company duly signed by all the subscribers to the memorandum in such manner as may be prescribed; (Rule 13, Chapter II) Rule 13 Signing of MOA & AOA.docx (b) A declaration in the form INC.8 by an advocate, a chartered accountant, cost accountant or company secretary in practice, who is engaged in the formation of the company, and by a person named in the articles as a director, manager or secretary of the company (Rule 14, Chapter II) (c) the affidavit shall be submitted by each of the subscribers to the memorandum and each of the first directors named in the articles in Form No.INC.9 (Rule 15, Chapter II) (d) Particulars of every subscriber to be filed with the Registrar at the time of incorporation Rule 16 Chapter II.docx (Rule 16, Chapter II) (e) Particulars of first directors of the company and their consent to act as such in Form DIR 12 along with the fee as provided. (Rule 17, Chapter II)
  • 6. One person Company 7. After Satisfying by Registrar, the Certificate of Incorporation shall be issued by the Registrar in Form No.INC.11. (rule 18, Chapter II)  OPC should have minimum 1 director; (sec. 149)  In case of OPC an individual being member is deemed to be its first director;(sec. 152)  Where an OPC has only 1 director, the date on which the resolution is signed and dated by such director is considered as the date of the board meeting;  Provisions of board meeting, quorum and interested director shall not apply to OPC; if there is only one Director (Proviso of sec. 173(5))  OPC need not hold an AGM; Provisions relating to notice, explanatory statement, EGM, quorum, voting, chairman, poll, proxies, postal ballot, NCLT’s power of calling for EGM does not apply to OPC;(sec. 122 (1)) i.e. The provisions of section 98 and sections 100 to 111 (both inclusive) shall not apply to a OPC;  Financial Statements can be signed by only one director;(sec. 134)  Financial Statements are to be filed with ROC within 180 days from the end of FY; (sec. 137)  OPC can contract with the sole member who is a director;(sec. 193)  The financial statement, with respect to OPC, may not include the cash flow statement; (sec. 2 (40))  Annual return is to be signed by Company Secretary & if there is no CS then Director of the company; (sec. 92) Some of the relaxations provided to OPC are as under:
  • 7. One person Company  Financial Statement:- (Sec. 2(40), Chapter I) “Financial statement” in relation to a company, includes— i. A balance sheet as at the end of the financial year; ii. A profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year; iii. A statement of changes in equity, if applicable; and iv. Any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iii). *Cash Flow Statement is exempted.  Annual Return:- (Sec. 92, Chapter VII) - It shall prepare its annual return in Form No. MGT.7. - Extract of Annual Return:- 1) The extract of the annual return to be attached with the Board’s Report shall be in Form No. MGT.9 (Rule 11) 2) A copy of the annual return shall be filed with the Registrar with fee as may be specified. (Rule 12) - file with the Registrar a copy of the annual return, within sixty days from the date on which the AGM is held or where no AGM is held in any year within sixty days from the date on which the AGM should have been held together with the statement specifying the reasons for not holding the AGM, with such fees or additional fees as may be prescribed, within the time as specified, under section 403. (Need Clarification) - Copies of all annual returns and copies of all certificates and documents required to be annexed thereto shall be preserved for a period of eight years from the date of filing with the Registrar.(Rule 15, Chapter VII) - Copy of Annual Return to any member, debenture-holder, other security holder or beneficial owner of the company or any other person on payment of such fee as may be specified in the Articles of Association of the company but not exceeding rupees ten for each page and such copy shall be supplied by the company within a Regulatory Compliances by OPC
  • 8. One person Company period of seven days from the date of deposit of fee to the company. (Rule 16, Chapter VII)  Annual General Meeting:- (sec. 96, Chapter VII) (The provisions relating to holding of AGM in 2013 Act are similar to 1956 Act) But not required to held AGM by OPC  Applicability of this Chapter to OPC:- (Sec. 122, Chapter VII) - The provisions of section 98 and sections 100 to 111 (both inclusive) shall not apply to OPC. (List Attached) Sec.docx - The ordinary businesses as mentioned section 102(2) (a) which a company, other than OPC, is required to transact at its AGM, shall be transacted, in case of OPC, as provided in sub-section (3). - For the purposes of section 114, any business which is required to be transacted at an AGM or other general meeting of a company by means of an ordinary or special resolution, it shall be sufficient if, in case of OPC, the resolution is communicated by the member to the company and entered in the minutes-book required to be maintained u/s 118 and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes under this Act. - Notwithstanding anything in this Act, where there is only one director on the BOD of a OPC, any business which is required to be transacted at the meeting of the BODs of a company, it shall be sufficient if, in case of such OPC, the resolution by such director is entered in the minutes-book required to be maintained u/s 118 and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors for all the purposes under this Act.  Financial Statement, Board Report’s etc.(Sec. 134,Chapter IX) - In the case of OPC, the financial Statement is signed by only one director, for submission to the auditor for his report thereon.
  • 9. One person Company - The auditors’ report shall be attached to every financial statement. - There shall be attached to statements laid before a company in general meeting, a report by BODs; report by BOD.docx - The report of the BODs to be attached to the financial statement under this section shall, in case of a OPC mean a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report. - The Board’s report and any annexure thereto shall be signed by its chairperson of the company if he is authorised by the Board and where he is not so authorised, shall be signed by at least two directors, one of whom shall be a managing director, or by the director where there is one director. - A signed copy of every financial statement shall be issued, circulated or published along with a copy each of— a. Any notes annexed to or forming part of such financial statement; b. The auditor’s report; and c. The Board’s report referred to in sub-section (3). - Penalty for Contravention of Provision of this sec.:- a) the company shall be punishable with fine which shall not be less than Rs. 50000 but which may extend to Rs. 25 lakh b) Every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.  Copy of financial Statement to be filed with registrar:- (sec. 137, Chapter IX) - OPC shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within 180 days from the closure of the financial year
  • 10. One person Company - If a company fails to file the copy of the financial statements i. the company shall be punishable with fine of Rs. 1000 for every day during which the failure continues but which shall not be more than ten lakh rupees, ii. managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.  Appointment of Directors:- (Sec, 152, Chapter XI) - An individual being member shall be deemed to be its first director until the director or directors are duly appointed by the member in accordance with the provisions of this section. - Save as otherwise expressly provided in this Act, every director shall be appointed by the company in general meeting - No person shall be appointed as a director of a company unless he has been allotted the DIN u/s 154. - Every person proposed to be appointed as a director by the company in general meeting or otherwise, shall furnish his DIN and a declaration that he is not disqualified to become a director under this Act. - A person appointed as a director shall not act as a director unless he gives his consent to hold the office as director in Form DIR 2 to Company and such consent has been filed with the Registrar within thirty days of his appointment in Form DIR 12 by Company: Provided that in the case of appointment of an independent director in the general meeting, an explanatory statement for such appointment, annexed to the notice for the general meeting, shall include a statement that in the opinion of the Board, he fulfills the conditions specified in this Act for such an appointment.
  • 11. One person Company  Meetings of Board: - (sec. 173. Chapter XII) OPC will be deemed to have complied with the provisions of this section if at least one meeting of the BOD has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days: Provision sec. 173.docx Provided that nothing contained in this sub-section and in Sec. 174 shall apply to OPC in which there is only one director on its Board of Directors.  Contract by OPC: - (Sec. 193, Chapter XII) If OPC enters into a contract with the sole member of the company who is also its director, the company shall, unless the contract is in writing: – ensure that the terms of the contract or offer are contained in the memorandum or are recorded in the minutes of the first Board meeting held after entering into the contract – Inform ROC about such contract within 15 days of entering into the contract. Provided that nothing in this sub-section shall apply to contract entered into by the company in the ordinary course of its business.