The One Person Company (OPC) was recently introduced as a strong improvement over the sole proprietorship. It gives a single promoter full control over the company while limiting his/her liability to contributions to the business. This person will be the only director and shareholder (there is a nominee director, but with no power until the original director is incapable of entering into contract). So there’s no chance of raising equity funding or offering employee stock options. Furthermore, if an OPC hits a turnover of over Rs. 2 crore or has a paid-up capital of over Rs. 50 lakh, it must be turned into a private limited company or public limited company within 6 months.
What is One Person Company (OPC)?
- Only One Shareholder:Only a natural person, who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company. Explanation: The term “Resident in India” means a person who has stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.
- Nominee for the Shareholder:The Shareholder shall nominate another person who shall become the shareholders in case of death/incapacity of the original shareholder. Such nominee shall give his/her consent and such consent for being appointed as the Nominee for the sole Shareholder. Only a natural person, who is an Indian citizen and resident in India shall be anominee for the sole member of a One Person Company.
- Director: Must have a minimum of One Director, the Sole Shareholder can himself be the Sole Director. The Company may have a maximum number of 15 directors.
Terms and Restrictions of OPC
- A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.
- Minor cannot shall become member or nominee of the One Person Company or can hold share with beneficial interest.
- An OPC cannot be incorporated or converted into a company under Section 8 of the Act. [Company not for Profit].
- An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
- An OPC cannot convert voluntarily into any kind of company unless two years have expired from the date of incorporation of One Person Company, except threshold limit (paid up share capital) is increased beyond Rs.50 Lakhs or its average annual turnover during the relevant period exceeds Rs.2 Crores i.e., if the Paid-up capital of the Company crosses Rs.50 Lakhs or the average annual turnover during the relevant period exceeds Rs.2 Crores, then the OPC has to invariably file forms with the ROC for conversion in to a Private or Public Company, with in a period of Six Months on breaching the above threshold limits.
Incorporation in 10 to 15 days Inclusions:
- DSC for director
- DIN for director
- Nominee Details Required PAN & Address Proof
- Name Reservation
- Memorandum & Articles of Association
- Certificate of Incorporation
- Company PAN & TAN
One Person Company Incorporation Process
|OPC Incorporation||Obtaining DSC & DIN|
|JRCC can incorporate a One Person Company in 5 days, subject to ROC processing time.||Digital Signature Certificate(DSC) and Director Identification Number(DIN) is required for the proposed Director of the OPC. DIN and DSC can be obtained for the proposed Director within 2 days.|
NEW: One Person Company Registration Process Using Form INC-29
|INC-29 Company Registration||Obtaining DSC & DIN|
|JRCC can incorporate a One Person Company using Form INC-29 in 5 days, subject to ROC processing time.||Digital Signature Certificate(DSC is required for the proposed Director of the One Person Company. DSC can be obtained for the proposed Director within 1 to 2 days.|