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Absolutely satisfied with the approach and the way in which my company incorporation process was handled. Clidel is professionally very sound and the executives are thorough with the procedure, being in a position to answer all your questions. My entire interaction was online and over the phone, being stationed outside India and not once did I face any difficulty. I recommend Clidel for all your company services. Mr. Sudeep and Ms. Sravani deserves special mention and appreciation.
One Person Company is a private limited company consisting of only one shareholder who is also the director of the company. OPC or One Person Company is an improvement over the traditional structure of sole proprietorship limiting the liability of the person to the total of his/her capital contribution towards the business.
There will be a nominee director who has no power until the original shareholder/director is rendered incapable of running the business eg. Due to death, incapacity of mind etc.
To incorporate an OPC an application must be made to ascertain availability of name of business by applying through Form INC-1. If the desired name is available then such name must be reserved. Within 60 days from such reservation INC-2 form which is the application for incorporation must be submitted.
FAQs On One Person Company Registration
1. What is One Person Company (OPC)?
The One Person Company (OPC) is a new form of company in India introduced by the Indian Companies Act of 2013. To form an OPC required are only one director and one member, both can be the same person. Thus, this one person company offers the benefits of both a sole proprietorship and a duly incorporated limited company. Moreover, this OPC is given the great facilities of the simpler legal and governance regimes for activities and operations of this, and lesser compliance requirements relating to the General Meetings and Board Meetings, as compared to those the private limited company and public limited company in India. Thus, an OPC is undoubtedly very suitable for professionals or businesspersons for starting a legally robust and secure company to nurture their respective professional or entrepreneurial skills and ambitions. Here, it may be noted that, a one person company cannot be incorporated as or converted into a section-8 company. Before its introduction in India, the one person companies got high prominence in many countries worldwide including USA, UK, China, Australia, Singapore, etc. However, these one person companies are not entitled to carry out activities of a non-banking financial company in India.
2. How to form an OPC in India? What are the Documents Required for OPC Registration?
To form a One Person Company anywhere in India, the concerned director/member must be either an Indian citizen or a Resident in India. A minor, foreign national/citizen, or NRI are restricted from establishing an OPC in India. A “Resident in India” is the person who has resided in any place of India for a period of at least 182 days in the immediately preceding calendar year.
3. What are the Advantages of Registering a Company as a One Person Company (OPC)?
The following are the most outstanding advantages associated with an OPC in India, over the private limited or public limited companies:
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.
4. Can an NRI Register a One Person Company in India? If Yes, then what are the conditions for the same?
No, no other persons than an Indian citizen or a Resident in India, can register a one person company anywhere in India. This means, a non-resident Indian (NRI), or a foreign national, cannot set up an OPC in India.
5. Is FDI allowed for OPC in India?
No, FDI into a one person company in India is restricted.
6. What are the Conditions when an OPC Must Change itself into a Pvt. Ltd Company or a Public Limited Company?
As per the Companies (Incorporation) Rules, 2014, a One Person Company has to change itself compulsorily into a private limited company or a public limited company, if at any point of time, its paid-up capital exceeds INR 50 Lac OR its average annual turnover of three immediately preceding consecutive financial years becomes more than INR 2 Crore. Under any of these conditions, the OPC is necessarily required to inform the relevant ROC through Form INC-5, within 60 Days of the exceeding threshold limits. Here, it may also be noted that an OPC cannot voluntarily change itself into any type of company, within two years of its incorporation, except under any of these two cases of exceeding the threshold limits.
7. How to Convert an OPC into a Pvt. Ltd Company or a Public Ltd Company in India?
Both in the cases of the voluntary conversion and the mandatory conversion, the concerned OPC is strictly required to follow the rules, provisions, and regulations provided in the Companies Act of 2013 under its Section 18, and in the Rule 7(4) of the Companies (Incorporation) Rules of 2014. Roughly, in addition to meeting the statutory requirements of the desired form of company, the OPC has to make certain necessary changes in its MOA and AOA to suit the targeted type of company. Here it should be noted that, for conversion into a private limited company, the interested OPC is required to have at least two directors and two shareholders. On the other hand, for conversion into a public limited company, the OPC needs to have at least seven shareholders and three directors. For voluntary or mandatory conversion of an OPC into a private limited company or a public limited company, the Application Form used will be Form INC-6.
In the case of the voluntary conversion, the OPC is required to submit the Form INC-6 along with the MGT-14 (containing the passing of a Special Resolution in the General Meeting in support of the proposed private limited or public limited company), to the concerned ROC within 30 Days of such a resolution. On the other hand, in case of the compulsory conversion, the OPC is required to file the Form INC-6 within Six Months counted from the date of exceeding any of the two threshold limits.
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