One Person Company Lunawat & Co. By: CA Rajesh Saluja OPC - - PowerPoint PPT Presentation

By: CA Rajesh Saluja

One Person Company

Lunawat & Co.

By: CA Rajesh Saluja

OPC

• Section 2(62) – One Person Company means a

company which has only one member.

• One Person Company may be either a Company limited

by share or a Company limited by guarantee or an unlimited Company.

• An OPC limited by shares shall comply with following

requirements:

• a.

Shall have minimum paid up capital of Rs.1,00,000/-. b. Restricts the right to transfer its shares. c. Prohibits any invitations to public to subscribe for the securities of the company.

By: CA Rajesh Saluja

OPC

• Section 3 (1)(c) – A company may be formed by one

person by subscribing his/her name to a memorandum. Only a natural person who is an Indian citizen and resident in India- shall be eligible to incorporate a One Person Company; shall be a nominee for the sole member of a One Person Company

By: CA Rajesh Saluja

OPC

Explanation.- For the purposes of this rule, the term "resident in India" means 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.

By: CA Rajesh Saluja

OPC

• 1. The memorandum shall indicate the name of the other

person, who shall, in the event of the subscriber’s death

• r his incapacity to contract become the member of the
• company. A written consent from such nominated person

shall be filed with registrar at the time of registration of OPC

• 2. That such nominated person may withdraw his

consent at a future date. Even the member has the right to change such nominated person.

• 3. In case a nominated person withdraws, the member

shall within 15 days of such withdrawal, nominate a new person and send an intimation to the company

By: CA Rajesh Saluja

OPC

• 4. The company shall within thirty days of receipt of the

notice of withdrawal of consent under sub-rule (3) 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 and the written consent of such another person so nominated in Form No.INC.3.

• 5. Member – Dies or is incapacitated to contract –

nominee becomes member – he has to appoint a nominee within 15 days of becoming a member – within 30 days file an intimation with Registrar

By: CA Rajesh Saluja

OPC

• 1. Wherever the name of the company shall be mentioned, it

should be noted that the word “One Person Company” must be written in the “()” below the name of the Company

• 2. No person shall be eligible to incorporate more than one

OPC or become nominee in more than one such company.

• 3. In a scenario where a member of a OPC, who is also a

nominee in another OPC, becomes member of this other OPC, he has time of 180 days to restore the status of being member of only one OPC

By: CA Rajesh Saluja

Advantage OPC

• 1. Cash Flow statement is not mandatory for One Person
• Company. (Section 2 (40))
• 2. Annual Return shall be signed by the Company Secretary
• r where there is no Company Secretary, by the Directors
• f the Company. (Section 92)
• 3. It is not compulsory to call Annual General Meeting.

(Section 96)

• 4. The provisions of Section 174 (Quorum for meetings of

Board) will not apply to One Person Company in which there is only one director on its Board of Directors.

By: CA Rajesh Saluja

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• 5. An individual who is member shall be deemed as first

director until the director or directors are duly appointed by the members according to the Provisions of the Act. (Section 152)

• 6. One Person Company may conducted Board Meeting, and
• ne meeting may be held in each half of a calendar year

and gap between two meetings should not be less than 90 days

• 7. One Person Company shall file its Financial Statement

along with necessary documents which is duly adopted by the Member within 180 days from the date of ending of financial year/ closure of financial year

By: CA Rajesh Saluja

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• 8. Where the company is having only one director, all the

businesses to be transacted at the meeting of the Board shall be entered into minutes book maintained under section 118

• 9. Minutes book shall be signed and dated by the director

and the resolution shall become effective from the date of signing such minutes by the director 10.Procedure mentioned in Pt. no 8 and 9 will also be applicable to Resolutions passed in general meetings 11.Such Company cannot be incorporated or converted into a company under section 8 of the Act (Charitable Objects).

By: CA Rajesh Saluja

Conversion of OPC into a Pub.

• r Pvt. Ltd. Co.
• 1. Voluntarily - By increasing no. of members to 2 & 2

Directors or 7 Members & 3 Directors as the case may

• be. But not before 2 years of incorporation.
• 2. Upon any of the following conditions:
• Paid up Share Capital > 50 Lacs
• Average Annual T/o of preceding three years > 2Cr.

Should covert within 6 months of:

• the day Paid up Share Capital crosses 50 Lacs
• the last day of the third year.

Alter its memorandum by passing a resolution U/s 122(3)

By: CA Rajesh Saluja

Conversion of OPC into a Pub.

• r Pvt. Ltd. Co.

Give notice to registrar in Form INC 5, within 60 days from activation of either of two conditions, informing that it has ceased to be a OPC In case of default, a fine which may extend to Rs.10000/-, and a fine of Rs. 1000/- per day till such default continues

By: CA Rajesh Saluja

Conversion of a Private Co. into OPC

A Private Co. having:

• Paid up Share Capital < 50 Lacs
• Average Annual T/o of preceding three years < 2Cr, may

convert itself into an OPC Shall obtain a NOC in writing from members and creditors Thereafter pass a special resolution in general meeting File the resolution within 30 days of passing in MGT.14

By: CA Rajesh Saluja

Concluding Comments

• One Person Company is a useful option

for Small entrepreneurs who wants to give their business a distinct identity with lesser legal compliance and benefits in comparison to Private Companies while at the same time limiting the liabilities to the extent of Capital Contribution

By: CA Rajesh Saluja