What is One Person Company (OPC)?

The concept of One Person Company also known as OPC is a new form of business, introduced by The Companies Act, 2013 [No.18 of 2013], thereby enabling Entrepreneur(s) carrying on the business in the Sole-Proprietor form of business to enter into a Corporate Framework. One Person Company is a hybrid of Sole-Proprietor and Company form of business, and has been provided with concessional/relaxed requirements under the Act.

What is DIN?

DIN is Director Identification Number given to an existing Director or potential Director of any Company which is incorporated or to be incorporated. It is a Unique Identification Number. DIN is issued by Ministry of Corporate Affairs.

What is DSC?

Digital Signature Certificate means singing the valuable documents electronically/digitally by an authorized person. It is used for signing the electronic forms. It cannot be used in physical documents.

Minimum and Maximum Number of Directors in One Person Company?

One Person Company must have a minimum of One(1) Director. The sole shareholder can himself become a Director. The OPC may have maximum of Fifteen (15) Directors.

Who is eligible to act as a member/nominee of an OPC?

Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. For the above purpose, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.

A Person can become a member in how many OPC?

A person can be member in only one OPC.

What if, if the turnover of the company exceeds Rs.2 Crores?

As per the Act, the average annual turnover during the relevant period should not exceed Rs.2 Crores. If it exceeds, then the company automatically get converted to a Private Limited Company.

What if a member of an OPC becomes a member in another OPC by virtue of being a nominee in that other OPC?

Where a natural person, being member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days.

What are the compliance exemptions for an OPC?

The Companies Act, 2013 has allowed following exemptions to the OPC from doing Compliances:

• Sign on annual returns by Practising Professionals.
• Hold Annual General Meetings and quarterly Board Meetings.
• Sign on Financial Statements.
• Option to dispense with the requirement of holding an AGM.
• Power of Tribunal to call meetings of members.
• Calling of extraordinary general meeting.
• Notice of meeting.
• Statement to be annexed to notice.
• Quorum for meetings.
• Chairman of meetings.
• Restriction on voting rights.
• Voting by show of hands
• Voting through electronic means.
• Demand for poll.
• Postal ballot.
• Circulation of members’ resolution.

Is Foreign Direct Investment allowed for One Person Company?

No, FDI is not allowed for One Person Company, if it is, then it will lose its One Person Company status.

Can Minor become a Director?

No, minor cannot become a Director because for Director DIN is compulsory and to get a DIN an individual should have achieved age of 18 years or above.

Can NRI/Foreign Nationals become a Director in an Indian Company?

Yes, NRI/Foreign National Can become a Director as well as a Shareholder of the Indian Company provided he should be a Competent to Contract and the Company in which NRI/ Foreign Nationals is/are Director(s), should have at least 1 Indian Resident as a Director on its Board of Directors

Can a Salaried person also become a director of a Company?

Yes, a salaried person can also become a Director of a Company provided employment agreement allow for such provisions. Generally, employers do not have any problem if their employee is Director of any Company.

What is Authorized Capital?

Authorized Share Capital is basically the maximum permissible amount of share capital that a company can issue to shareholders. A Company can change its authorized share capital whenever it require from time to time depending upon the requirement of the company subject to shareholders/members approval.

What is Paid-up Capital?

Paid-up share Capital also known as the Issued share Capital of the company is an amount of shares issued by a company to its share holders.

What is Registered Office?

The registered office of a Company or legal entity is the principle/main place of business for a company and all official correspondence is sent to this location.

What is MoA- Memorandum of Association?

According to Section 2(56) of the Company Act, 2013 “Memorandum” means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act. It is a Charter document of the company which contains basic and fundamental details about the company. Any act done beyond the scope of the MoA is void.

What is AoA – Article of Association?

Article of Association are by-laws of the Company. It contained Rules & Regulation followed by the Company. It defines objectives, duties and powers of the Board of Director, Borrowing Capacity, Voting Rights, Procedure for issue and transfer of Shares.

Can we increase Authorised Capital & Paid-Up Capital after Incorporation?

Yes, Authorised Capital & Paid-Up Capital can be increased anytime after incorporation.