One Person Company
with Companies (Incorporation) Rules, 2014
As per section 2(62), “ one person company” as a company which has only one person as a member.
One person company is a type of private company as per section 2(68) and 3(1)(c) of the act.
[Rule 3]
(1) Only a natural person who is an Indian citizen whether resident in India or otherwise
(a) shall be eligible to incorporate a one person company;
(b) shall be a nominee for the sole member of a one person company.
(2) A natural person shall not be a member of more than one person company at any point of time and the said person shall not be a nominee of more than one person company.
(3) Where a natural person, being a member in One Person Company in accordance with this rule becomes a member in another such Company by virtue of his being a nominee in that One Person Company, such person shall meet the eligibility criteria specified in sub rule (2) within a period of one hundred and eighty days.
(4) No minor shall become a member or nominee of the One Person Company or can hold shares with beneficial interest.
(5) Such Company cannot be incorporated or converted into a company under section 8 of the Act.
(6) Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporates.
Nomination by the Subscriber or Member of One Person Company [Rule 4]
(1) The subscriber to the Memorandum of a one person company shall nominate a person, after obtaining prior written consent of such person, who shall, in the event of the subscribers death or his in capacity to contract, become the member of that one person company.
(2) Name of the nominee mentioned in the memorandum and nomination details along with consent of such nominees shall be filled in Form No. INC-32 (SPICe+) as a declaration &
The said form along with fee shall be filled with the registrar at the time of incorporation of the company along with its e-memorandum and e-articles.
(3) The person nominated by the subscriber or member of a one person company may withdraw his consent by giving a notice in writing to such sole member and to the one person company.
Provided that the sole member shall nominate another person as a nominee within 15 days of the receipt of the notice of withdrawal and shall send an intimation of such nomination in writing to the company, along with the written consent of such other persons or nominated in which shall be filled in form of declaration in Form No. INC-4
(4) The company shall within 30 days of receipt of the notice of withdrawal of consent file with the registrar, a notice of such withdrawal of consent and the intimation of the name of another person nominated by the sole member in Form No. INC-4 along with the fee and written consent of such another person so nominated in the form of a declaration in Form No. INC-4.
(5) The subscriber or member of a one person company may, by intimation in writing to the company, change the name of a person nominated by him at any time for any reason including in case of death or incapacity to contract of nominee and nominate another person after obtaining the consent of such another person and his declaration shall be filled in Form No. INC-4.
Provided that the company shall, on the receipt of such intimation, file with the registrar, a notice of such change in Form No. INC-4 along with fee and with the particulars of consent of new nominee in for a declaration in Form No. INC-4 within 30 days of receipt of intimation of the change.
(6) Where the sole member of one person company ceases to be the member in the event of death or incapacity to contract and his nominee becomes the member of such one person company, such new members are nominate within 15 days of becoming member, a person who shall in the event of his death or his incapacity to contract become the member of such company, and the company shall file with the registrar an intimation of such cessation and nomination in Form No. INC-4 along with the fee provided, within 30 days of the change in membership and with the particulars of consent of the person so nominated in form of declaration in Form No. INC-4.
Conversion of One Person Company into a Public Company or Private Company [Rule 6]
(1) The One person Company shall alter its memorandum and articles by passing a resolution in accordance with section 122(3) of the act to give effect to the conversion and to make necessary changes incidental thereto.
(2) A One person company may be converted into a private or public company, other than a company register under Section 8 of the act, After increasing the minimum number of members and directors to two or seven members and 2 or 3 directors, as the case maybe, and maintaining the minimum paid up capital as per the requirements of the act for such class of company and by making due compliance of Section 18 of the act for conversion.
(3) The company shall file an application in e- Form No.INC-6 For its conversion into a private or public company, other than section 8 of the act along with fees as provided in the companies ( registration appreciation and fees) rules 2014 with altered e- MOA and e-AOA.
(4) On being satisfied that the requirements have been complied with, the registrar after examining the latest audited financial statements shall approve the form and issue certificate.
Conversion of Private Company into One Person Company [Rule 7]
(1) A Private company other than a company registered under Section 8 of the act may convert itself into one person company by passing a special resolution in the General Meeting.
(2) Before passing such resolution, the company shall obtain no objection in writing from members and creditors.
(3) The one person company shall file a copy of the special resolution with the registrar of Companies within 30 days from the date of passing the special resolution in Form No. MGT-14.
(4) The company shall file an application in Form No. INC-6 Its conversion into one person company along with fees as provided in the Companies (Registration Offices and Fees) Rules, 2014, by attaching the following documents, namely:
(i) The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion;
(ii) The list of Members and list of Creditors;
(iii) The latest Audited Balance Sheet and the Profit and Loss Account; and
(iv) The copy of No Objection Letter of secured creditors.
(5) On being satisfied and complied with requirements stated herein the Registrar shall issue the Certificate.
Penalty [Rule 7A]
If a one person company or any officer of such company contravenes any of the provisions of these rules, the one person company or any officer of the such company shall be punishable with fine which may extend to 5000 rupees and with a further fine which may extend to 500 rupees for every day after the first offence during which such contravention continues.
Benefits or Privileges or Exemptions of One Person Company
Basically OPC is a private company with a sole member to use the suffix OPC with their name. Hence there are exemptions or relaxations given to OPC from various compliance requirements as under -
(1) Not required cash flow statement. [Sec.2(40)]
(2) Ordinary or special resolution of Annual General Meeting or any other meeting shall be sufficient to enter in the Minutes Book and such date shall be deemed to be the date of the meeting. [Sec.122(3) & 122(4)]
(3) Financial statements and board reports can be signed by only one director. [Sec.134(1)]
(4) Board report contains only -
(i) explanations or comments by the board on every qualification.
(ii) reservation or adverse remark or disclaimer made by the auditor in his report. [Sec.134(4)]
(5) Only one director is sufficient on the board. [Sec.149(1)]
(6) Required to hold at least one meeting of the board of directors in each half of a calendar year and the gap between the two meetings should not be less than 90 days. [Sec. 173(5)]
(7) Not applicable provisions of meetings to OPC
(i) Meetings of board [Sec.173]
(ii) Quorum for meetings of board [Sec.174]
(8) Annual return need not be signed by a CS in practice. [Sec.92(1)]
(9) Need not hold Annual General Meeting [Sec.96(1)] and prepare a report on Annual General Meeting [Sec. 121(1)]
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