One Person Company (OPC)

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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 member.”

A One Person Company can be incorporated as a private limited company only.

The Key features of One Person Company are -:

  1. Only one member is required . 
  2. Ease of running business.
  3. Less compliance 
  4. Unaffected by the change in ownership

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Documents Required For One Person Company (OPC)

  • PAN Card of owner
  • Passport size photograph of owner
  • Aadhaar Card/ Voter identity card
  • Rent agreement / NOC (If rented property)
  • Electricity/ Water bill (Business Place)

 

  1. An OPC limited by shares must comply with following requirements :
    • Must have a minimum [paid up share capital of INR 1 Lac.
    • Shares will not be allowed to be transferred to anyone else.
    • An OPC is prohibited from giving any invitations to public to subscribe for the securities of the company.

  2. When an 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, the terms of contract or offer must be recorded in writing or contained in a memorandum or recorded in the minutes of the Board meeting held next after entering into the contact.

  3. An OPC must inform the Registrar about every contract entered into by the company with the sole member of the company within a period of fifteen days from the date of approval.

Any individual/organization can become the member of One person company including foreigners NRI’s.

Advantages of OPC

  • To form an OPC, only one Director is needed.
  • The Section 173 which dictates that a limited company should conduct at least four Board meetings every year, is not applicable for OPCs.
  • The provisions and regulations given in Section 98 and Sections from 100 to 111, which relate with general meetings, are also not applicable to OPCs.
  • An OPC also enjoys relaxations and exceptions from many other legal, governance, ad regulatory compliances.
  • The mandatory rotation of auditor after every five-year period, is also not applicable to an OPC.

The Steps of incorporate OPC are as follows:

  • Name reservation: In order to check the name availability, INC- 1 from needs to be filed.
  • Incorporation of OPC: Form INC- 2 needs to be filed after the name approval within 60 days of the filing of INC- 1
  • DIR- 12 (linked with INC-2) needs to be filed. However, in case the promoter is the sole director of the OPC, the DIR-12 can be avoided.
  • In case the correspondence and the registered office address is not the same, form INC- 22 needs to be filed within 30 days once the INC- 2 form is registered.

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