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One Person Company means a company which has only one member’ It shall also be important to note that Section 3 classifies OPC as a Private Company for all the legal purposes with only one member. All the provisions related to the private company are applicable to an OPC, unless otherwise expressly excluded.
An OPC is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder.
As per Section 62 of Companies Act, 2013, One Person Company means a company which has only one person as a member. One Person Company is popularly known as OPC. (a) Shall be eligible to incorporate a One Person Company; (b) shall be a nominee for the sole member of a One Person Company.
In terms of section 3(1)(c) of the 2013 Act, an OPC may be formed for any lawful purpose by one person. Salient features in relation to incorporation include:
The memorandum of association of an OPC shall indicate the name of another person (nominee), with his prior written consent, who shall, in the event of the subscriber’s death or his incapacity to contract become the member of the company. This provision will ensure perpetuity and continuity to the life of the Company. The written consent of such person shall also be filed with the registrar of companies at the time of incorporation of the OPC along with its memorandum and articles.
By the rules only Indian resident can avail of ‘One Person Company’ benefit and the word ‘One person Company’ shall be a part of the name of the company as per Section 12(3) of the Act.
The paid up capital of the OPC cannot exceed 50 lakhs and its average annual turnover cannot exceed 2 crores.
A person can incorporate a maximum of 5 OPCs. [Rule 2.1(2)]
Get a free consultation for One Person Company (OPC) Registration with filling and Business Setup in India by Scheduling an appointment with an Adhimukti Associates Advisor.
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