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One-person Company is the company, where there is only one Promoter/founder. As per the Companies Act 2013, One-person Company is the important milestones to encourage self-employment with a backbone of India’s legal system.
One Person Company requires only 1 member and in, case of death or any other incapacity of the original member (1 nominee, who becomes the member of the company).
Note – Here, member refers to someone who subscribes to Memorandum and has their name in the Register of members and holds shares of the company with their name in the records of depository.
Note – Resident means who stayed in India for 182 days in the preceding calendar year.
There are certain advantages enjoyed by the OPC mentioned below-
The OPC has to convert itself into a private or public company mandatorily, If In case the paid-up share capital of an OPC exceeds 50 lakh rupees or its average annual turnover exceeds 2 crore rupees immediately preceding three consecutive financial years.
Further, if the OPC exceeds the threshold limits it is required to be converted into a private or public company and the OPC shall inform the Ministry of Corporate Affairs while filing the form INC-5. INC-5 shall be filed within 60 days of exceeding the threshold limits. Additionally, for the conversion of an OPC into a private or public company. An OPC shall file Form INC-6.
Note – Same in the case of conversion of Private Company or Public Company into OPC, the private company or Public company will also file form INC-6 for converting itself into an OPC.
The paid-up share capital of a private company should not be exceeding 50 Lakh rupees.
Average annual turnover shall not exceed more than 2 crore rupees.
The company shall be having one member and in case of death or incapacity of the member, it shall appoint 1 nominee to act as member at the time of conversion into OPC.
A person can be a member of only 1 OPC.
Note – Being member in One Person Company when a person by virtue of his being a nominee in that OPC, becomes a member in another OPC ,in that case such person shall meet the eligibility criteria of being a member in only 1 OPC within a period of 180 days, i.e., the person shall withdraw his/her membership from either of the OPCs within 180 days.
In case of intimation of change in nominee by the member or withdrawal of consent by the nominee of an OPC Form INC-4 shall be filed which implies
As per the enactment of the new Companies Act 2013, it has recognized the ability of the individuals forming a company i.e. a single person can form a company effectively as its member. Basically, these companies are formed where there is only one founder and promoter in the business. As sole proprietorship does not offer several advantages that One Person company offers. Taxation policies under OPC shall be applied as applicable in Private limited company. OPC is expected to give a significant impact to uplift the corporate sector in the country and is totally free from the regulatory mess ups.