A one person company allows a sole proprietor to incorporate their business as a separate legal entity with limited liability, where only one person is required as both the sole shareholder and sole director to form the company. Key requirements for a one person company include the sole member and nominee being Indian citizens and residents. The concept provides benefits like perpetual succession and easier financing while reducing compliance requirements compared to other company structures.

1. Company Law Notes
One Person Company
Created By Chetan Verma

2. Company Law Notes
One Person Company
Created By Chetan Verma
What is One Person Company?

3. Created By Chetan Verma
What is One Person Company?
One person company is a new concept in
India which has been introduced by the
companies act 2013. In the old
Companies act 1956 a minimum of two
directors and shareholders were required
to form a private limited company.
However in case of a One person
company, only 1 person is required who
can be a shareholder as well as the
Director. Hence the name, One Person
Company. As per section 2(62) of the Companies Act,
2013, “One Person Company” means a
company which has only one person as a
membe

4. Created By Chetan Verma
Concept of One Person Company?
The concept is
specially beneficial for
sole proprietors and
entrepreneur who can
take the advantages of
Limited liability and
corporatization.

5. Created By Chetan Verma
Difference between OPC and ProprietorOPC VS. SOLE PROPRIETORSHIP
O P C S O L E P R O P R I E T O R S H I P
Separate Legal entity Not a Separate Legal Entity
Limited Liability unlimited liability
Perpetual succession No perpetual succession
-Loan not the sole responsibility Loan-sole responsibility of the of the owner
-owner Registration required Registration not required
Finance –credit record of the OPC Finance –credit record of the Owner

6. Created By Chetan Verma
Who can Incorporate?
One Person Company (Rule 3 of Companies (Incorporation) Rules, 2014)
(1) Only a natural person who is an Indian citizen and resident in India, i.e., a
person who has stayed in India for a period of not less than one hundred and
eighty two days during the immediately preceding one calendar year shall be
eligible to incorporate a One Person Company and a nominee for the sole
member of a One Person Company.
(2) A person shall not be eligible to incorporate more than one OPC or become
nominee in more than one such company.
(3) A minor shall not become member or nominee of the One Person Company
or can hold share with beneficial interest.

7. Created By Chetan Verma
Director?
A One Person Company may
have only one director. But
at the same time there is no
bar on more number of
directors. However, as per
the Act, the total number of
directors shall not be more
than 15.

8. Created By Chetan Verma
Nominee ?
This is a very important concept where the person forming the One Person
Company has to nominate a Nominee with his written consent who, in the
event of death or inability to contract of the owner of the One Person
Company, shall come forward and take over the reins of the one person
company.
Please note that the requirements of being a resident Indian and citizen of
India also apply to the nominee. Further if the person so nominated becomes
the member of such a One Person Company and is already a member of
another One Person Company, at the same time, by virtue of rules has to
decide within 6 months which one person company he has to continue. One
more thing, the member can change the nominee at any point of time.

9. Created By Chetan Verma
Compliance ?
No requirement to hold annual or extra ordinary general meetings.
– No requirement of preparing cash Flow in the annual financial statements
Annual returns can be signed by the Director himself instead of A Company
Secretary

10. Created By Chetan Verma
Incorporation steps.
Steps to Incorporate One Person Company (OPC)
-Obtain Digital Signature Certificate [DSC] for the proposed Director(s).
-Obtain Director Identification Number [DIN] for the proposed director(s).
-Select suitable Company Name, and make an application to the Ministry of
Corporate Office for availability of name.
-Draft Memorandum of Association and Articles of Association [MOA & AOA].
-Sign and file various documents including MOA & AOA with the Registrar of
Companies electronically.
-Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp
Duty.
-Scrutiny of documents at Registrar of Companies [ROC].
-Receipt of Certificate of Registration/Incorporation from ROC.

11. Created By Chetan Verma
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