Posted on: Friday,January 17, 2020
While starting up a business, one question that comes to mind is the form of business, i.e., and it should be a Partnership or sole proprietorship or private limited company. So to reduce confusion, let's see OPC in more detail.
According to the Companies Act, 2013
Only a natural person who is an Indian Citizen and resident of India.
1. Shall be eligible to incorporate a One Person Company.
2. Shall be a nominee for the sole member of a One Person Company.
The same conditions apply to the nominee of the company. Law prohibits minors from becoming members or nominees of OPC.
Features of One Person Company-
A. Single-member- OPC's can only have one member.
B. Nominee- Sole member of the company has to mention a nominee while registering the company.
C. No perpetual succession- In case of death of a member of OPC, it is on nominee whether he wants to become a member or not. So, no perpetual succession occurs like other companies.
D. No minimum paid-up share capital- Companies Act does not prescribe minimum paid-up share capital for OPC.
Step 1 – Application for Director Identification Number in form DIR-3 and DSC
A. Director Identification Number is a unique identification number issued by the Ministry of Corporate Affairs, for an existing director or a person intending to become a director of a company.
B. Documents required for DIR-3 application
- Identity proof- a copy of the PAN card.
- Address proof- a copy of passport or Election ID or voter ID or driving license or adhaar card or Electricity/ telephone bill.
- Passport size photograph
- Current occupation
- Email address of the applicant
- Mobile Number
- Educational qualification
- Verification to be signed by the applicant who applied for OPC
DIR-3 shall be digitally signed by the applicant and by either of the following -
1. Company Secretary (in whole-time practice) or Chartered Accountant (in full-time practice) or Cost Accountant.
2. Company Secretary in full-time employment or Director of the company in which the applicant is to be appointed as a director.
C. Digital Signature Certificate is the digital equivalent of paper certificates. Ministry of Corporate affairs accepts electronic submission of the form on its website the DSC is compulsory for all its users.
Step 5 – Uploading Process
Visit official website of Ministry of Corporate affairs.
Log in with a password and upload form SPICE along with SPICE Memorandum of Association and SPICE Article of Association.
Step 6 – Online Payment
After filing the documents online, the Next step is the payment of RoC fees and stamp duty electronically, which is based upon the Authorised Capital of the company.
Once the form is approved, digitally signed ‘Certificate of Incorporation’ is sent to the directors through email.
A. One Person Company means a company that has only one member. (section 2 (62)).
B. One person may form a company by subscribing to his/her name to a memorandum.(Section 3 (1)(c)). A natural person who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company; shall be a nominee for the sole member of a One Person Company.
C. Cash Flow statement is not mandatory for One Person Company. (Section 2 (40))
D. Annual Return shall be signed by the Company Secretary or where there is no Company Secretary, by the Directors of the Company. (Section 92)
E. It is not compulsory to call the Annual General Meeting. (Section 96)
F. The provisions of( Section 174) (Quorum for meetings of Board) will not apply to One Person Company in which there is only one director on its Board of Directors.
G. An individual who is a member shall be deemed as the first director until the members duly appoint the Director or directors according to the Provisions of the Act. (Section 152)
H. Where the company has only one director, all the businesses to be transacted at the meeting of the Board shall be entered into minutes book maintained under (section 118)
I. Such a Company cannot be incorporated or converted into a company under (section 8) of the Act (Charitable Objects).
Although One Person Company has a few disadvantages, the Indian Version of One Person Company is very sound and complete.