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ONE PERSON COMPANY

A One Person Company is a company with a single member. It was introduced by the Companies Act, 2013. OPC extends the concept of limited liability to a company run by a single person. It is similar in respects to a private limited company with certain differences like fewer compliances and relaxation of certain restrictions. Thus, an OPC is subject to all the provisions of the Act like a private limited company unless expressly excluded.

The idea of One Person Company (OPC) in India was introduced to give a boost to entrepreneurs who have great potential to start their own venture by allowing them to create a single person company. Since, no intervention from any third party is seen, it makes it more beneficial. So, if you want to start up your own business, you don’t have to worry about all the complex and tedious processes.

One Person Company, which is a new concept in India, already sees a big boom. A huge impact on the economy and development of nation is expected. It gives opportunities to many and will therefore bring creative and young minds in front of everyone.

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Limited Liability

Reasons to Register a One Person Company

Seprate Legal Entity
Uninterrupted Existence
Borrowing Capacity
Single Promoter

Concerns Related to OPC Registration

  • Minimum authorised share capital required for One Person Company having share capital is Rs.1,00,000/-.

  • Minimum and maximum number of members for One Person Company is one only.

  • The subscriber to the Memorandum must make the payment for the total amount of shares subscribed by him to the company upon incorporation.

  • It is a separate legal entity yet only one person is responsible for the workings of the company. A total contrast from what Sole Proprietorship offers.

  • There can be only one member at a time. However, one nominee is mandatory to be appointed. This member and nominee cannot be a minor.

  • An OPC can be limited by guarantee or limited by shares or unlimited company.

  • An OPC limited by shares must comply with following requirements :

    • Must have a minimum paid up share capital of INR 1 Lac.

    • Shares will not be allowed to be transferred to anyone else.

    • An OPC is prohibited from giving any invitations to public to subscribe for the securities of the company.

  • No OPC can voluntarily convert into any other kind of company within two years from the date of incorporation of One Person Company, except when the threshold limit of paid up share capital, being fifty lakh rupees, is crossed or its average annual turnover during the relevant period exceeds two crore rupees.

  • An OPC is required to give a legal identity by specifying a particular name under which the activities of the company can be carried on. The words ‘One Person Company’ must be mentioned with the name of the company.

  • An OPC is subject to the same taxes as a Private Limited Company.

  • When an OPC limited by shares or by guarantee enters into a contract with the sole member of the company, who is also the director of the company, the terms of contract or offer must be recorded in writing or contained in a memorandum or recorded in the minutes of the Board meeting held next after entering into the contact.

  • An OPC must Inform the Registrar about every contract entered into by the company with the sole member of the company within a period of fifteen days from the date of approval.