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Incorporating One Person Company in India

Published on 07 Apr 2016 by Team

OPC or ‘One Person Company’ is defined in part 2(62) of the Corporations Act, 2013 as a corporation which has only one individual as a member. In line with part 2(sixty-eight) of the Act, it is the subdomain of an exclusive company.

Who Can incorporate OPC?

In line with Rule 3 of the corporations (Incorporation) principles 2014, simplest a natural individual who's the citizen and resident of India can-
contain one man or woman enterprise and as well as might be a nominee for the only member of a one-individual company.

Aspects of OPC

  • Minimum paid-up share capital is 1 lakh.

  • OPC can both be a corporation restricted by share/company restricted by guarantee or a limitless organization.

  • The phrases ‘one man or woman company’ need to be acknowledged in brackets beneath the title of one person enterprise, for example- Srivastava organization Ltd (One person manufacturer)

  • One man or woman organization must mention the title of the nominee/different character within the memorandum of association, with his prior written consent and the identical should be filed with the registrar on the time of incorporation.

  • Maximum Director- 15, minimum Director- 1.

  • OPC don't need to maintain AGM ( Annual basic assembly)

  • Registrar should be informed about all the contracts entered via the OPC.

Process for Incorporation of OPC

  • DIN (Director Identification quantity) and Digital Signature certificate– initially, the sole shareholder/director must get Director Identification number from the Ministry of Corporate Affairs and also get Digital Signature Certificates.
  • Title of the enterprise– The second step entails the only shareholder to apply for the identity of the enterprise.
  • Consent of the Nominee– The subscriber to the memorandum of ‘one character manufacturer’ shall nominate a person, after acquiring the written consent of such person, who shall, in the event of subscriber’s dying or his incapacity to contract, become the member of that one character company. [1]
  • Incorporation- type INC- 2 is the shape for incorporation of ‘one individual enterprise’ which has to be submitted to the registrar along with the next attachments-
  • Memorandum of association
  • Articles of association
  • Proof of identification of the member and the nominee.
  • Residential proof of the member and the nominee.
  • A copy of PAN card of member and nominee.
  • Consent of nominee in kind INC- three.
  • An affidavit from the subscriber and first director to the memorandum in kind INC-9.
  • List of the entire firms (specifying their CIN) having the equal registered place of business deal with if any.
  • Specimen signature in type INC- 10.
  • Entrenched articles of association.
  • Proof of registered place of the business handle.
  • Copies of the utility expenses. (not older than 2 months)
  • Proof that the manufacturer is authorized to use the handle because of the registered place of a job of the enterprise if the same is owned by every other entity/individual.
  • Consent from the director.
  • Optional attachments.
  • Ultimate Incorporation certificates– After doing all of the formalities, the subscriber shall receive the ultimate incorporation certificate from the registrar of the companies. The business will also be commenced henceforth.
  • E– filing– the subscriber may also do e-filing for the incorporation of the corporation with the aid of filling e- form INC-2 and attaching different vital documents.

Conversion of OPC to Private or Public company

According to Rule three(7) of the firms (Incorporation) ideas, 2014, a man or woman enterprise can't voluntarily convert into another style of enterprise except two years have expired from the date of incorporation. After two years from the date of incorporation, one man or woman enterprise could convert into every other enterprise even without threshold limit.

The brink restrict is an exception to the above rule that's if the paid-up share capital exceeds fifty lakh rupees or the annual turnover for the duration of the significant period exceeds two crore rupees then it shall cease to be one individual corporation. (Rule 6(1) of the businesses (Incorporation) rules 2014) and get changed into a personal or public company.
After this, the one man or woman manufacturer shall within sixty days from the date of applicability gives notice to the registrar that it has ceased to be “one person company” and that now it's required to transform itself right into a confidential corporation with the aid of virtue of its exceeding paid-up share capital.

Such one character manufacturer will likely be required to transform itself, inside of six months of the date on which its paid-up share capital has multiplied past fifty lakh rupees or the last date of crucial period for the period of which its annual natural turnover exceeds two crore rupees because the case could also be, into either a confidential organization with minimum of two individuals and two directors or a public organization with at least of seven participants and three directors in accordance with the provisions of section 18 of the Act.
The conversion will be performed after making imperative transformations in the memorandum and article of organization and likewise by using giving notice to the registrar in type INC- 5.

Conversion of Private Limited into OPC

A private organization, as opposed to a manufacturer registered underneath part 8 of the Act having paid up share capital of fifty lakh rupees or less or usual annual turnover for the duration of the important interval, is two crore rupees or less could convert itself into one character organization by passing a targeted resolution within the normal assembly. The enterprise shall acquire NO objection certificates, and such resolution will probably be filed with the registrar of organizations within 30 days in type no. MGT14.
The enterprise shall file an application in form no. INC 6 for its conversion into ‘one man or woman manufacturer’. On delight and compliance with requirements, the registrar shall quandary the certificates.

It may be concluded that the notion of ‘one individual organization’ was brought into motion with the purpose to motivate small-scale industries and organizations and, thus, the approach of incorporation of the same is kept easy in order that the organization may also be included via the subscriber without dealing with many difficulties.

Also, Read 5 Things You Need To Know Before Incorporating A Company

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