One Person Company Registration

The concept of One Person Company Registration (OPC) Registration is introduced by The Companies Act, 2013 

ONE PERSON COMPANY REGISTRTION IN INDIA 

1. One Person Company has 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. 

A single shareholder holds 100 percent shareholding. 

A person can be a shareholder in only one OPC at any given time. 

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2. One Person Company must have Nominee for the individual 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 a nominee for the sole member of a One Person Company. 

Member can change the nominee at any point of time.

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3. One Person Company has minimum One 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.

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4. Taxation on One Person Company:

It is assumed that the rates of taxation applicable for a private limited company shall apply to a One Person Company. Net profits, which are calculated by deducting all allowable expenses from the turnover of sales, shall be taxable at the rate of 30 percentage + education cess.

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5. Freedom from compliance of One Person Company:

1. No requirement to hold annual or extra ordinary general meetings. Only the resolution shall be communicated by the member of the company and entered in the minutes book and signed and dated by the member and such date shall be deemed to be the date of meeting.

2. For the purposes of holding board meetings, in case of a OPC which has only One director, it shall be sufficient compliance if all resolutions required to be passed by such a company at a board meeting are entered in a minute book – signed and dated by the member and such date shall be deemed to have the date of the board meeting for all the purposes under Companies Act, 2013.

3. No requirement of preparing cash Flow statements

4. Annual returns can be signed by the Director 

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6. Related Party Transactions applicable on One Person Company:

Where OPC enters into a contract with the sole owner/Director, the company shall, unless the contract is in writing, ensure that the terms of the contract are recorded in the minutes of the first meeting of the Board of Directors of the company held next after entering into contract.

Further, the company shall inform the Registrar about every contract entered into by the company and recorded in the minutes of the meeting of its Board of Directors under sub-section (1) within a period of 15 days of the date of approval by the Board.

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7. Terms and conditions of One Person Company:

1. A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company. (A Person can be member in only 1 OPC)

so now take an example whereby Mr. A was member of ABC OPC and Nominee of XYZ OPC

Now if Mr. A becomes member of XYZ OPC by virtue of Nominee then he becomes member of two OPC.

then in this case he has to leave membership of one of the OPC in 180 days.

   2. Minor cannot become member or nominee of the One Person Company or can hold share with beneficial interest.

   3. An OPC cannot be incorporated or converted into a company under Section 8 of the Act. 

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 An OPC cannot convert voluntarily into any kind of company unless two years have expired from the date of Incorporation of OPC, 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 then the OPC has to compulsorily file forms with the ROC for conversion to a Private or Public Company, with in a period of Six Months .

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8. Process of Incorporation of One Person Company:

First the sole shareholder/Director shall get a DIN & DSC. Then name of the company will be applied. Then consent along with the incorporation forms will be filed. COI will be issued by Registrar of Companies.

Remember One Person Company name on COI will be in the following format XYZ Private Limited (OPC).

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Step by Step procedure for One Person Company Registration are:

1. Apply for DSC of promoter cum director of OPC

2. Apply for Name of OPC under registration

3. Once name is approved, file Documents related to Incorporation, DIN will be generated in due course no need to apply for DIN before hand.

4. File necessary documents of promoter cum director as well as nominee of promoter cum director 

5. COI, PAN, TAN will be issued by MCA.

6. Open current account and start doing business.

Compiled By 

CS Ruchi Dawar

ruchi.dawar@gmail.com

Agra