Monday, 2 May 2016

One Person Company under Companies Act, 2013






What is One Person Company?
  • Section 2 (62) of Companies Act 2013 defines ONE PERSON COMPANY- Means a Company which has only one person as a Member.
Who shall be a Member?
  1. Indian Citizen
  2. Resident in India
Define Resident in India?
  • Means a person who has stayed in India for a period of not less than 182 days immediately preceding 1 Calendar year.
Important Note:  The person mentioned above can incorporate only 1 One Person Company.
How to apply for Incorporation of OPC?
  • Step 1 : Form INC 1 shall be filed for Availability of name.
  • Step 2 : After name approval, Form INC 2 shall be filed for Incorporation of OPC within 60 days of filing INC 1
Important Note:  The Subscriber to MOA of a OPC shall nominate a person after obtaining prior written consent of such person who shall in the event of Subscriber’s death become the member of OPC.
The name of such person shall be mentioned in MOA of OPC and such nomination in Form INC 2 along with consent of nominee in Form INC 3.
Main Attachments along with Form INC 2
  • MOA & AOA
  • PROOF OF IDENTITY OF MEMBER AND NOMINEE
  • ADDRESS PROOF OF MEMBER AND NOMINEE
  • PAN COPY OF MEMBER & NOMINEE
  • CONSENT OF NOMINEE IN INC 3
  • AFFIDAVIT FROM SUBSCRIBER AND FIRST DIRECTOR IN FORM INC 9
  • SPECIMEN SIGNATURE IN FORM INC 10
  • PROOF OF REGISTERED OFFICE ADDRESS LIKE LEASE DEED OR RENT AGREEMENT
  • COPIES OF UTILITY BILL NOT OLDER THAN 2 MONTHS
  • CONSENT FROM DIRECTOR
Main Features of OPC
  • No Company can voluntarily convert into Company of any other kind unless 2 years have expired from the date of Incorporation, except in cases where capital or turnover threshold limits are reached.
Interpretation :  If the Paid up share capital of Company exceeds 50 Lakhs Rupees or its Average Annual Turnover exceeds 2 crore Rupees during these 2 Years, then it shall cease to become OPC  and shall have to convert it into either a Private Company or a Public Company. (Rule 6 of Companies Incorporation Rules)
Such OPC is required to convert itself either as a Public Company or Private Company within a Period of 6 months from the date on which paid up share capital or turnover exceeds threshold Limit.
Important Note: The OPC shall within a period of 60 days from the date of applicability of above provisions, give the notice to the Registrar in Form INC 5 informing that it has ceased to be an OPC.
  • Minimum and Maximum number of Member under OPC SHALL BE 1
  • Minimum No Director 1
Relaxations Available to OPC
  • Mandatory Rotation of Auditor after expiry of Maximum term is not applicable
  • OPC shall not require to constitute AGM.
  • OPC having more than 1 Director, it shall hold one Board Meeting in half of Calendar year and time lag between 2 Meetings shall not be less than 90 days.
In short requirement of minimum no of Board meeting shall not apply to OPC.
Miscellaneous Provisions
  • No minor can become Member or nominee of OPC
  • OPC shall not carry out non-banking financial investment activities
  • OPC cannot be converted or incorporated into a section 8 Company ( NPO Company )
  • OPC shall not invest into the securities of Body Corporate.
Exclusive Section for OPC – section 193 of Companies Act 2013
Can a OPC enter into a Contract with sole member of the Company who is also the Director of the Company?
Yes, as per Section 192 of Companies Act 2013, OPC limited by shares or by guarantee enters into a Contract with the sole member of the Company who is also the Director of the Company subject to certain conditions :
1. The Contract in writing shall ensure that terms of Contracts are mentioned in MOA of Company
OR
Terms of Contract shall be recorded in the First Board Meeting of the Company held next after entering into the Contract.
Important Note: Nothing in this sub section shall apply to Contracts entered into by the Company in the Ordinary Course of business.
2. The Company shall inform the Registrar about every Contract entered into by the Company and recorded in the minutes of the meeting of its Board within a period of 15 days from date of approval by the Board of Directors.
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