One Person Company - Lunawat & Colunawat.com/Uploaded_Files/Presentation/OnePersonCompany.pdfBy: CA...
Transcript of One Person Company - Lunawat & Colunawat.com/Uploaded_Files/Presentation/OnePersonCompany.pdfBy: CA...
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
or 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
or where there is no Company Secretary, by the Directors
of 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
More on OPC
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
one 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
More on OPC
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.
or 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.
or 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