One Person Company Registration
A One Person Company is, as the name suggests, a private limited comprised of only one shareholder who doubles up as the director. Unlike a traditional private limited company, there can only be one shareholder and one director. However, there would be a nominee director who would take over the affairs of the company in the event the director / shareholder is not able to, such as in the event of his death.
- No AGM’s - An OPC does not need to mandatorily hold annual general meetings under the law.
- No Board Meetings - In the case of an OPC with one director, the need to hold board meetings have been dispensed with. The resolutions to be passed can be entered in the minutes and signed by the director.
- Financial Statements - The financial statements need to be signed by the sole director alone.
- Sole member director - Since there is only one member who is also the director, there is incredible flexibility afforded to him/her to run the business as they deem fit.
Unfortunately, going in for an OPC is a double edged sword, having a few cons to its name.
- Funding - An OPC cannot issue shares to any individual apart from the one member, nor can it have a director who is not the sole member. This effectively rules out funding.
- Conversion - An OPC may not be converted into a private limited unless 2 years from the date of incorporation has passed or fifty lakh has been surpassed as paid up capital, two crores has been surpassed in turnover.
- Limitations - A person cannot be a member of more than one OPC, whereas she can be a director in many private limited companies, in comparison.
Procedure for OPC
- Costs and Nomenclature - The fees for incorporating a private limited with authorized capital of one lakh and the fees for an OPC with the same capital are the same, thereby making it not as attractive an option. Further, just as companies need to add pvt. ltd. to their names, an OPC must add OPC pvt. ltd after its name.
- Name Reservation - In order to incorporate as an OPC, an application must be made by way of INC-1 to ascertain the availability of the name chosen for the OPC and reserve such name. Such name reservation is valid for a period of 60 days, within which the applicant must file INC-2 to incorporate the OPC.
- Incorporation [ INC-2 ] - The application for incorporation of the OPC is done by way of filing INC-2.
- INC-22 - Within 30 days of the incorporation of the OPC achieved by way of registration of Inc-2, INC-22 should be filed in case the registered office address and the address for correspondence are not the same.
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