05-Apr-2022 ONE PERSON COMPANY (OPC) FORMATION PROCEDURE IN INDIA
register-a-companyA person as a single promoter can incorporate a Company and have the benefit of limited liability and separate legal entity of a Company.
HOW TO REGISTER A ONE PERSON COMPANY (OPC)
With an OPC, there is no requirement for a Partner or Co-Founder. In this article, we look at the procedure for incorporation of a One Person Company in detail.
THE ELIGIBILITY CRITERIA FOR FORMING AN OPC
- 1. Only a natural person who is an Indian citizen and resident in India can be member and nominee of an OPC.
- 2. A natural person shall not be a member and nominee of more than a One Person Company at any point of time.
- 3. No minor shall become member or nominee of the One Person Company or can hold share with beneficial interest in such OPC.
- 4. Such Company cannot be incorporated or converted into a company under section 8 (Company with Charitable Objects) of the Act.
- 5. Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any other body corporate.
- 6. No such company can convert voluntarily into any kind of company unless two years is expired from the date of incorporation of One Person Company except in the case if its falls under the mandatory conversion criteria.
- 7. Company shall state word ‘OPC’ in the bracket after the name of the Company, like XYZ (OPC) Private Limited.
NOMINEE IN ONE PERSON COMPANY
The rules for incorporation of one person company requires that the sole member of a One Person Company should include the name of a nominee in the company’s MOA, who will undertake the entity after the expiry or incapacity of the former. Moreover, the document must contain the written consent of the nominee, which must also be filed with the Registrar during incorporation along with the MOA and AOA.
INCORPORATION PROCESS
| STEPS | PARTICULARS
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| STEP 1 | Obtain digital signature of the proposed member and OPC.
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| STEP 2 | Name approval of the Company via RUN – In accordance with Rule 9 of the Companies (Incorporation) Rules, 2014, an application for reservation of name shall be made by using Form RUN (Reserve Unique Name) along with fee of Rs. 1000/- It is to be noted that reservation of name and application for DIN are available with the Form No. INC. 32 also
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| STEP 3 | The name if allotted shall be valid for a period of 20 days.
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| STEP 4 | Form No.lNC-32 (SPICe) – For Incorporation Form INC. 32 is to be filed with the Registrar along with the following attachments:
It is to be noted that the details as required shall be filled in Form INC-3 and after check form, take the print out of the form and sign it. The same is required to be enclosed as attachment in eForm INC 32 (SPICe).
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| STEP 5 | File Form SPICe MOA and Form SPICe AOA with the Registrar pursuant to Section 4 And 5 of Companies Act, 2013 respectively. Further, the MOA of an OPC shall contain an additional clause i.e. nominee clause. No attachments required.
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| STEP 6 | After all the requirements, ROC shall issue a certificate of incorporation in Form No. INC-11.
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CHECKLIST FOR REGISTERING OPC
- 1. Minimum and maximum of one member.
- 2. A nominee should be appointed before incorporation.
- 3. Consent of the nominee should be obtained in Form INC-3.
- 4. The name of the OPC must be selected as per the provisions of the Companies (Incorporation Rules) 2014.
- 5. Minimum authorized capital of Rs.1 lakh.
- 6. DSC of the proposed director.
- 7. Proof of registered office of the OPC.
WHAT IS THE MANDATORY COMPLIANCE THAT AN OPC NEEDS TO OBSERVE?
- 1. At least one Board Meeting in each half of the calendar year and the time gap between the two Board Meetings should not be less than 90 days.
- 2. For the purposes of quorum, in case of a single Director, it shall be sufficient if the passed resolutions is entered in the minute’s book and signed and dated by such director.
- 3. Maintenance of proper books of accounts and carrying out statutory audit of Financial Statements.
- 4. Filing of business income tax returns every year.
- 5. Filing of Financial Statements and ROC Annual Return every year. Further One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year.
- 6. In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover of immediately preceding three consecutive financial years exceeds two crore rupees, then the OPC has to mandatorily convert itself into private or public company.
- 7. The provision of holding of Annual General Meeting is not applicable to OPC