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.
