One Person Company [OPC] is the Sole- Proprietorship form of business enabling Entrepreneur(s) carrying on the business to enter into a Corporate One Person Company is a hybrid of Sole-Proprietor and Company form of business. The introduction of OPC in the system is a move which encourages small businesses and entrepreneurship with a simpler legal regime.
Documents Required for Company Registration?
- Registrar Office Address and registered office’s address proof.
- Identity proof, address proof and PAN card copy of nominee and member.
- Written Consent of Nominee
- Memorandum and Affidavit of a sharer.
- Application for Company Registration.
- Reservation application of the name.
Advantages of One Person Company
- An OPC can avail the various benefits provided to Small Scale Industries.
- Exempted from procedural formalities like AGM, EOGM etc.
- A proprietorship can be converted into OPC with ease.
- An OPC can raise funds.
- Liability of the OPC is limited to the extent of the value of the share an individual hold.
Requirements to Form OPC:
- Only Indian citizens who are also residents of India are allowed to incorporate OPC.
- Only one shareholder is allowed.
- Maximum paid-up share capital and turnover are Rs.50 Lakhs and Rs. 2 Crores respectively.
- Govt. Fees to be paid for the minimum of shares worth Rs.1 Lakh (Authorized Capital).
- An individual can incorporate only one OPC.
- Only one Director and a nominee and both above 18 years of age.
- Obtain Digital Signature Certificate [DSC] and DIN for the proposed Director(s).
- Select a suitable name and make an application to the Ministry of Corporate Office.
- Draft Memorandum of Association and Articles of Association [MOA & AOA].
- Sign and file required documents with the Registrar of Companies electronically
- Payment of requisite fee and stamp duty to Ministry of Corporate Affairs.
- Receipt of Certificate of Registration/Incorporation from ROC.
Frequently Asked Questions for OPC Company
Who is eligible to act as a member of an OPC?
Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC.
In how many OPCs a person can be a member?
A person can be a member in only one OPC.
What are the minimum and maximum requirement for the number of directors in OPC?
A Company must have a minimum of One Director, a sole shareholder can himself be the sole director. A Company has a maximum number of 15 directors which can also be increased by passing a special resolution as in case of any other company.
What are the restrictions in OPC?
Following are the restrictions in OPC:
-> A minor cannot become a member or nominee of OPC or can hold the share with beneficial interest.
-> Minimum and the maximum number of members for One Person Company is one only.
-> An OPC cannot be incorporated or converted into Not Profit Organisation.
-> An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any form of body corporate.
-> An OPC cannot convert voluntarily into any kind of company unless two years have been expired from the date of incorporation of Company.
What are the privileges available to OPCs?
-> Annual Return shall be signed by the company secretary, or where there is no company secretary, by the director of the company.
-> Mandatory rotation of auditor after the expiry of the maximum term is not applicable.
-> The financial statements of an OPC can be signed by one director only.
-> Cash Flow Statement is not a mandatory part of financial statements for OPC.
Are there any threshold limits for an OPC to mandatorily get converted into either private or public company?
In case the paid-up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover during the relevant period exceeds two crore rupees immediately preceding three consecutive financial years, then the OPC has to be mandatorily converted into other forms of the company.
What is the minimum capital level required for incorporating OPC?
Minimum authorized share capital required for One Person Company having share capital is Rs. 1,00,000/-.