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One Person Company

A One Person Company (OPC) is the latest form of business launched in the year 2013. OPC is for single owner/founder who do not find any organized and safe form of business, OPC can be formed by a single member with least compliances and maintenance.

Steps to form a One Person Company

Obtain
DSC
Apply for
DIN
Name
approval
Consent of the nominee in prescribed form

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Procedure

Important Features

One Person Company (OPC) requires only one person and one nominee to start a registration process. Nominee is the person who shall take control of the company in case of death of sole member.

Steps to form a One Person Company Registration

  • Step 1 : Obtain DSC
  • Step 2 : Apply for DIN
  • Step 3 : Name Approval
  • Step 4 : Consent of the nominee in prescribed form
  • Step 5 : Then he shall file the consent along with the final incorporation forms with the Memorandum and Articles and other required documents

Concepts behind One Person Company

One share holder

One Person Company is defined in the Companies Act as a Company which has only one member. A single shareholder holds 100 percent shareholding. Only a natural person who is a resident of India and also a citizen of India can form a one person company. It means that other legal entities like companies or societies or other corporate entities cannot form a one person company. Further it also means that Non resident Indians or Foreign citizens cannot form a one person company.

One Director

The other important point is that a One Person Company may have only one director but at the same time there is no bar on more number of directors. However, as per the Act, the total number of directors shall not be more than 15

Nominee

One Person Company has to nominate a Nominee with his written consent who, in the event of death or inability to contract of the owner of the One Person Company, shall come forward and take over the reins of the one person company.

Taxation

It is assumed that the rates of taxation applicable for a private limited company shall apply to a One Person Company.

Freedom from Compliance

One Person Company also gets freedom from complying with many requirements as normally applicable to other private limited Companies. Certain sections like Section 96, 98 and sections 100 to 111 are not applicable for a One Person Company. Some of these are mentioned below:

  • * No requirement to hold annual or extra ordinary general meetings.
  • * No requirement of preparing cash Flow in the annual financial statements

Conversion from one person company to Pvt Ltd and vice versa

It is provided in the Act that when a One Person Company reaches a paid up Capital of 50 lakh rupees or more or when the average turnover of the company which is Rs. 2 Crores or more for a period of 3 years, then the company shall be converted into a private limited company after making the necessary changes in the memorandum of association and articles of association and shall comply with all the requirements of a private limited company.

Conversion of a private limited company into a one person company- A private limited company which does not have a paid up capital of more than Rs. 50 Lakhs or where the average annual turnover for the past 3 years is less than Rs. 2 Crores can convert itself into a One Person Company and enjoy the benefits as such.

Documents

  • Pan card of director & nominee
  • Aadhar card of director & nominee
  • Photos of director & nominee
  • Bank statement with latest transaction
  • Mobile number & email id
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