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One Person Company

One Person Company

What is One Person Company Meaning ?

A company with only one person as a member is called a One Person Company. This is a paradigm shift from the Companies Act 1956, where minimum two members are required for float private limited company as well as a public company.

For the first time the concept of One Man Company or OPC was introduced in India under Companies Act 2013 and the intent apparently has been to permit entrepreneurship of a single individual, wanting to obtain the benefit of a corporate form of organization. This concept has opened huge business opportunities for small entrepreneurs.

A single individual can form a company satisfying all the legal requirements of the law for a definite purpose, usually for profit making. A One Person Company has only one person as a member who will be promoter and director of the company. Therefore it is a single shareholder corporate entity, where legal and financial liability is limited to the company only.

Minimum Requirements for One Person Company Registration?

  • Minimum 1 shareholder
  • Minimum 1 director (director and shareholder can be same person)
  • Minimum 1 nominee
  • Shareholder/nominee to be Indian resident
  • Minimum authorized share capitals. 1 lakh
  • Digital signature certificate for director
  • Director identification number for the director

Nomination in case of One Person Company

  • The memorandum of OPC requires to indicate the name of the other person who has given his consent in the prescribed form to be so named. This person shall, in the event of the member becoming incapacitated due to death or incapacity to contract, become a member of the company.
  • The written consent of such other person along with the incorporation documents while forming OPC, shall also be filed.
  • TThe memorandum of the company requires to state the name of the person who in the event of the death of the subscriber shall become a member of the company.
  • The member has all powers at any time to change the name of the nominee by giving notice in the prescribed form.
  • The new nominee should also give his own consent to his name so appearing and any change in the nominee shall require amendment in the memorandum of association.
  • He must be a natural person, an Indian citizen resident in India and not a minor.

A nominee can withdraw his nomination by giving his consent to the member and the OPC. In that case, the member shall nominate another person within 15 days of the notice of withdrawal after obtaining his written consent and send intimations of such nomination to the company. The OPC is required to file the notice of withdrawal of consent and fresh nomination within a period of 30 days from the notice of withdrawal.

Advantages of One Person Company Registration

Features of One Person Company are:
  • It must have only one member at any point of the time and may have only one director. There shall be only one member.
  • It is run by individuals yet OPCs are separate legal entities like that of any registered corporate
  • A One Person Company is incorporated as a private limited company.
  • It must have only one member at any point of time and may have only one director.
  • TThe members and nominees should be natural persons, Indian Citizens and resident of India.
  • One person cannot incorporate more than one OPC or become a nominee in more than one OPC
  • OPC to lose its status if paid up capital exceeds RS. 50 lakhs or averages annual turnovers is more than 2 crores in three immediately preceding consecutive years.
  • No minor shall become members or nominees of the One Person Company or hold share with beneficial interest.

What is annual compliance for One Person Company ?

  • Form AOC-4 for financial statement
  • MGT-7 for an annual return
  • Meeting of board at least twice in a year