.The concept of One Person Company [OPC] is a new vehicle/form of business, which was introduced by The Companies Act, 2013 [No.18 of 2013], thereby enabling the Entrepreneur(s) to carry on the business in the Sole-Proprietor to form of business to enter into a Corporate Framework.
One Person Company is thus a hybrid of a Sole-Proprietor and a Company form of business. It has been provided with the concessional/relaxed requirements under the one person Act.
This article will tell about the rules and regulations that one person company registration needs to follow.
Only one shareholder:
Features of One Person Company (OPC)
Only a natural person, who is an Indian citizen and a resident in India shall thus be eligible to incorporate a One Person Company.
The Shareholder shall thus nominate another person who would become the shareholders in case of death/incapacity of the original shareholder. Such nominee shall thus give his/her consent and such consent for the appointment as the Nominee for the sole Shareholder. Only a natural person, who is an Indian citizen and a resident in India shall thus be the nominee for the sole member of a One Person Company.
The company needs to have a minimum of One Director, the Sole Shareholder can thus himself be the Sole Director. The Company may, however, have a maximum number of 15 directors.
Terms and the Restrictions of OPC Registration
- A person shall thus not be eligible to incorporate more than a One Person Company. Or to become a nominee in more than one such company.
- Minor cannot, however, become a member or a nominee of the OPC or cannot hold a share with a beneficial interest.
- An OPC also cannot be incorporated or be converted into a company under Section 8 of the Act. [Company not for Profit].
- It also Can’t carry out Non-Banking Financial Investment activities including the investment in securities of any body corporate.
- An OPC also cannot convert voluntarily into any kind of company. Until and unless two years have expired from the date of incorporation of a One Person Company. Except for the threshold limit increases beyond Rs.50 Lakhs or its average annual turnover during the relevant period. IT, However, exceeds Rs.2 Crores i.e., if the Paid-up capital of the Company crosses Rs.50 Lakhs. Or the average annual turnover which is during the relevant period exceeds Rs.2 Crores. Then the OPC thus has to invariably file forms with the ROC for the process of conversion into a Private or Public Company. It should be within a period of Six Months on the breaching the above threshold limits.
Related Topic: What are the advantages of OPC Registration?
Board Reports for OPC and Small Company