INTRODUCTION

The introduction of OPC in the legal system is a move that would

encouragecorporatizationofmicrobusinessesandentrepreneurshipwith
asimplerlegalregimesothatthesmallentrepreneurisnotcompelledto
devote considerable time, energy and resources on complex legal
compliances. This will not only enable individual capabilities to
contributeeconomicgrowth,butalsogenerateemploymentopportunity.
OnePersonCompanyofsoleproprietorandcompanyformofbusiness
has been provided with concessional /relaxed requirements under the
CompaniesAct,2013.WiththeimplementationoftheCompaniesAct,
2013,asinglenationalpersoncanconstituteaCompany,undertheOne
PersonCompany(OPC)concept.

DEFINITION
Asperprovisionofsection2(62)oftheCompaniesAct,2013defined
(62)onepersoncompanymeansacompanywhichhasonlyoneperson
asmember.

FORMATIONOFOPC[Rule3]
Only a natural person who is an Indian citizen and resident in
India
shallbeeligibletoincorporateaOnePersonCompany;
shallbeanomineeforthesolememberofaOnePersonCompany.
ThetermresidentinIndiameansapersonwhohasstayedinIndiafora
periodofnotless182daysimmediatelyprecedingonecalendaryear.

STAGESOFINCORPORATIONOFOPC
Namereservation:FormINC1shallbefiledfornameavailability.
IncorporateOPC:Afternameapproval,formINC2shallbefiledfor
incorporationoftheOPCwithin60daysoffilingformINC1.
Form DIR12 shall be filed along with (linked) form INC2 except
whenpromoteristhesoledirectoroftheOPC.
ThecompanyshallfileformINC22within30daysonceformINC2
is registered in case the address of correspondence and registered
officeaddressarenotsame.

SALIENTFEATURESOFOPC
OnepersoncannotincorporatemorethanoneOPCorbecomenominee
inmorethanoneOPC.
No minor shall become member or nominee of the One Person
Companyorholdsharewithbeneficialinterest.
Nosuchcompanycanconvertvoluntarilyintoanykindofcompany
unless2yearshaveexpiredfromthedateofincorporation,exceptin
caseswherecapitalorturnoverthresholdlimitsarereached.
Itmusthaveonlyonememberatanypointoftimeandmayhaveonly
onedirector.

PRIVILEGESAVAILABLETOOPC
Themostsignificantreasonforshareholderstoincorporatethesingle
personcompanyiscertainlythedesireforthelimitedliability.
Businesses currently run under the proprietorship model could get
convertedintoOPCswithoutanydifficulty.
Mandatory rotation of auditor after expiry of maximum term is not
applicable.
OnePersonCompanyneedstohaveminimumofonedirector.Itcan
havedirectorsuptoamaximumof15whichcanalsobeincreasedby
passingaspecialresolutionasincaseofanyothercompany.
TheprovisionsofSection98andSections100to111(bothinclusive),
relating to holding of general meetings, shall not apply to a One
PersonCompany.
MinimumauthorizedsharecapitalrequiredforOnePersonCompany
havingsharecapitalisRs.1,00,000/.
MinimumandmaximumnumberofmembersforOnePersonCompany

isoneonly.

PROHIBITEDACTIVITIES
1.Such Company cannot be incorporate or converted into a company
undersection8oftheAct.
2.Such Company cannot carry out NonBanking Financial Investment
activitiesincludinginvestmentinsecuritiesofanybodycorporate.

ONE PERSON COMPANY TO CONVERT ITSELF INTO A

PUBLICCOMPANYORAPRIVATECOMPANYINCERTAIN
CASES(RULE6)

1.CompulsoryconversionofOPC
o WherethepaidupsharecapitalofanOnePersonCompanyexceeds
Rs. 50 lacs or its average annual turnover exceeds Rs. 2 crores
immediatelyprecedingthreeconsecutivefinancialyear;
o SuchOPCshallrequiredtoconvertitself,intoeitherprivatecompany
orpubliccompanyinaccordancewiththeprovisionofsection18of
theActwithin6monthofthedateasmentionabove.
o The OPC shall alter its memorandum and articles by passing a
resolutioninaccordancewithsection122(3)oftheActtogiveeffect
totheconversionandtomakenecessarychangesincidentalthereto;
o The OPC shall within period of sixty days from the date of
applicability of above provisions, give a notice to the Registrar in
FormNo.INC.5informingthatithasceasedtobeaOPCandthatit
isnowrequiredtoconvertitselfintoaprivatecompanybyvirtueofits
paidupsharecapitaloraverageannualturnover,havingexceededthe
thresholdlimitlaiddownabove.

2.VoluntaryconversionofOPC
AOnePersonCompanycangetitselfconvertedintoaPrivateorPublic

companyafterincreasingtheminimumnumberofmembersanddirectors
totwoorminimumofsevenmembersandtwoorthreedirectorsasthe
casemaybe,andbymaintainingtheminimumpaidupcapitalasper
requirementsoftheActforsuchclassofcompanyandbymakingdue
complianceofsection18oftheActforconversion.

CONVERSION OF PRIVATE COMPANY INTO ONE PERSON

COMPANY[RULE7]
I. APrivatecompanyotherthanacompanyregisteredundersection8of
the Act having paid up share capital upto Rs. 50 lacs or average
annual turnover during the relevant period upto Rs. 2 crore may
convert itself into One Person Company by passing a special
resolutioningeneralmeeting.
II. BeforepassingsuchresolutionthecompanyshallobtainNoObjection
inwritingfrommembersandcreditors.
III. Theonepersoncompanyshallfilecopyofthespecialresolutionwith
theRegistrarofcompanies(ROC)within30daysfromthedateof
passingsuchresolutioninFormNo.MGT14.
IV. The Company shall file an application in Form No. INC. 6 for its
conversionintoOnePersonCompanyalongwithfeesspecified,by
attachingfollowingdocuments,namely:
thedirectorsofthecompanyshallgiveadeclarationbywayof
affidavitdulysworninconfirmingthatallmembersandcreditorsof
thecompanyhavegiventheirconsentforconversion,thepaidup
sharecapitalofthecompanyisRs.50lacsorlessoraverageannual
turnoverislessthanRs.2croreorless,asthecasemaybe;
thelistofmembersandlistofcreditors;
thelatestAuditedBalanceSheetandtheProfitandLossAccount;
and

 thecopyofNoObjectionletterofsecuredcreditors.
Onbeingsatisfiedandcompiledwithrequirementsstatedhereinthe
RegistrarshallissuetheCertificate.