One Person Company Registration

One Person Company is set to organize the unorganized sector of proprietorship firms. OPC will have incredible prospect and it will be embraced as a booming business model. For small to mid level entrepreneurs, OPC is the scope for them to grow and to get recognition globally even for their single person entity. Comparatively in OPC there will be less paper work. OPC allows a single person to run a company with limited liability, in case of a sole proprietorship.

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.

One Person Company can be started with any amount of capital. As per latest circular, MCA has removed the Minimum Capital required for formation an OPC.

A person can be member in only one OPC.

In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.

The Director of the OPC can be remunerated and contracts can be entered with it shareholders and its directors. Directors’ remuneration, rent and interest are deductible expenses which reduces the profitability of the Company and ultimately brings down taxable income of your business.

No. Only an Indian citizen and resident can form an One Person Company.

Following persona are disqualified to form an One Person Company: o A minor. o A foreign citizen. o Non-Resident. o A person incapacitate to contract. o Any other person apart from living person.

An One Person Company can engage in any sort of business activities apart from Non Banking Financial Investment Activities including “investment” in securities of body corporates.

OPC can be registered only as a private company which means that all the provisions applicable to private company will be applicable to an OPC, unless otherwise expressly excluded in the Act or rules made there under.

OPC cannot be incorporated or converted into Section 8 Company (i.e. company with charitable objects, etc.) or carry out non-banking financial activities, including investment in securities of any body corporate.

There can be five types of OPCs that can be incorporated under the new Act, viz. 1. OPC Limited by Shares; 2. OPC Limited by Guarantee with Share Capital; 3. OPC Limited by Guarantee without Share Capital; 4. Unlimited OPC with Share Capital, and 5. Unlimited OPC with Share Capital.

OPC (also Small Cos. and Dormant Cos.) is deemed to have complied with S. 173, if at least one meeting of the BOD is has been conducted in each half of a calendar year and the gap between two meeting is not less than 90 days. Section 173 and 174 (Quorum of Meeting of BOD) will not apply to an OPC in which there is only one director on its Board. Further, an OPC is not required to hold an AGM.

Financial Statement of an OPC has to be approved by the Board and needs to be signed by only one director for submission to the auditor. It is to be noted that an OPC need not prepare Cash Flow Statement as part of its financial statement. The copy of such financial statement along with other documents etc. must be filed with the ROC within 180 days from the closure of the financial year. Report of the Board to be attached to the financial statement shall mean, in case of an OPC, a report containing explanations or comments by the Board on every qualifications, reservations or adverse remarks or disclaimer made by the auditor in his report.

Annual Returns of an OPC must be signed by a company secretary and the director. In case there is no company secretary, the signature is required only from the Director. Mandatory rotation of auditor after expiry of maximum term is not applicable to an OPC.

If an OPC or any officer of such company contravenes the provisions of Co. Incorporation Rules, 2014, such contravening party will be punishable with fine which may extend to Rs. 10,000/- and with a further fine which may extend to Rs. 1000 for every day after the first during which such contravention continues.

Following sections are not applicable to OPCs- • Section 98 (Power of Tribunal to call meetings of members, etc.) • Section 100 (Calling of EGM) • Section 101 & 102 (Notice of Meeting & Statements to be annexed to Notice) • Section 103 (Quorum of Meetings) • Section 104 (Chairman of Meetings) • Section 105 (Proxies) • Section 106 (Restriction on Voting Rights) • Section 107 & 108 (Voting by show of Hands & by Electronic Mode) • Section 109 & 110 (Demand for Poll & Postal Ballot) • Section 111 (Circulation of Member’s Resolutions)

Every company shall, at the first Annual general meeting appoint an individual or a firm as an auditor who shall hold the office from the conclusion of that meeting to the conclusion of its sixth annual general meeting and the manner and procedure of selection of auditors by the members of the company at such meeting shall be such as may be prescribed.