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FAQ on One Person Company

 1

How to incorporate an OPC?


Name reservation: Form INC-1 shall be filed for name availability.

Incorporate OPC: After name approval, form INC-2 shall be filed for incorporation of
the OPC within 60 days of filing form INC-1.

Form DIR-12 shall be filed along with (linked) form INC-2 except when promoter is the
sole director of the OPC.

The company shall file form INC-22 within 30 days once form INC-2 is registered in
case the address of correspondence and registered office address are not same.

2.

How to inform RoC about change in


membership of OPC?
The company shall file form INC-4 in case of cessation of member of OPC on account of death,
incapacity to contract or change in ownership. In the same form, user needs to provide details of
the new member of the OPC.

 3

Is there any threshold limits for an OPC to


mandatorily get converted into either private
or public company?
In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual
turnover of immediately preceding three consecutive financial years exceeds two crore rupees,
then the OPC has to mandatorily convert itself into private or public company.
How to intimate RoC that the OPC has
exceeded the threshold limits and require
conversion into private or public company?
The OPC shall inform RoC in form INC-5, if the threshold limits is exceeded and is required to
be converted into private or public company.

 5

What is the time limit for filing form INC-5?


Form INC-5 shall be filed within sixty days of exceeding threshold limits.

 6

Is there any form that is to be filed for


conversion of an OPC into private or public
company? Is there any other purpose for
filing this form?
Form INC-6 shall be filed by an OPC for conversion of an OPC into private or public company.

Yes, the private company will also file form INC-6 for converting itself into an OPC. The paid
up share capital of private company should not be exceeding fifty lakh rupees and should not
have average annual turnover more than two crore rupees at the time of such conversion into
OPC. The company shall be having one member and shall appoint one nominee to act as member
in case of death or incapacity of the member at the time of conversion into OPC.

. 7

What is the time limit for filing form INC-6?


Form INC-6 shall be filed within 30 days in case of voluntary conversion and within six months
of mandatory conversion.
 8

Who is eligible to act as a member 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.

 9

A person can be a member in how many


OPCs?
A person can be member in only one OPC.

 10

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.

11

Which form is to be filed in case of


withdrawal of consent by the nominee of an
OPC or in case of intimation of change in
nominee by the member?
Form INC-4 shall be filed in case of withdrawal of consent by the nominee or in case of
intimation of change in nominee by the member.

Steps to Register a new Company


 1

How can I register an Indian Company?


Incorporating a company through Simplified Proforma for Incorporating Company
electronically (SPICe -INC-32), with eMoA (INC-33), eAOA (INC-34), is the default
option and most companies are required to be incorporated through SPICe only.

Incorporation through SPICe (For details, SPICe FAQs on home page may be
referred)

1. Stakeholders can avail of 5 different services (Name Reservation, Allotment of


Director Identification number (DIN), Incorporation of New Company, Allotment of
PAN and Allotment of TAN) in one form by applying for Incorporation of a new
company through SPICe form (INC-32) - Simplified Proforma for Incorporating
Company electronically (SPICe) - with eMoA (INC-33), eAOA (INC-34). In case eMoA,
eAoA are not applicable, users are required to attach the pdf attachments of MoA and
AoA. There is no need for reserving a name separately before filing SPICe. One name for
the proposed company can be applied for in SPICe (INC-32).

2. Please note that a Section 8 company (Companies with Charitable Objects) can also be
incorporated using SPICe form but after reserving a name using INC-1.

Incorporation through INC-7 in exceptional cases (For details, SPICe FAQs on


home page may be referred)

1. Apply for the name of a company to be registered by first filing Form INC-1.

2. After approval of name, depending upon the proposed company type, file the
incorporation forms listed below:

Sr.No. Type of Company eForm Linked Forms, as


applicable
Section 8 company with less than 7 SPICe eMoA (INC-33), eAoA
01
subscribers (INC-32) (INC-34)
Section 8 company with more than 7
02 INC-7 DIR-12, INC-22
subscribers
DIR-12, INC-22, URC-
03 Chapter XXI (Part I) company INC-7
1
04 Producer company INC-7 DIR-12, INC-22
New Company - Others (including OPC) SPICe eMoA (INC-33),
05
with less than 7 subscribers (INC-32) eAOA (INC-34)
New Company - Others (including OPC) DIR-12, INC-22, URC-
06 INC-7
with more than 7 subscribers 1

 2

How can I register a Part I Company?

 2

How can I register a Part I Company?


In order to register Part I Company, applicant is required to file Form INC-1 for name
availability, first. After approval of the same, applicant is required to file Form No. URC-1 along
with filing e forms INC-7, INC-22 and DIR-12 or e-forms INC-7 and DIR-12 as the case may
be.

 3

How can I register a Section 8 Company?


To register a section 8 company, applicant is required to file Form INC-1 for name availability.
Once the name is approved, there is a further requirement of obtaining a license for a Section 8
Company, for which Form INC-12 is to be filed by such a company. After obtaining the license
number, applicant can proceed further to incorporate a company by filing e forms SPICe or INC-
7 (in case number of subscribers are more than seven) along with linked forms as the case may
be.
 4

How can Foreign companies establish a place


of business in India?
Any foreign company can establish its place of business in India by filing eForm FC-1
(Information to be filed by foreign company).

Note: The eForm needs to be digitally signed by authorized representative of the foreign
company. There is no need to apply and obtain DIN for Directors of a foreign company.
However, it is mandatory to register the DSC of the authorized representative of the foreign
company via associate DSC service available at MCA portal.
What is One Person Company (OPC)?
The concept of One Person Company [OPC] is a new vehicle/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.
Register One Person Company

Features of One Person Company (OPC)


1. Only One Shareholder:
Only a natural person, who is an Indian citizen and resident in India shall be eligible to incorporate a One Person
Company. Explanation: The term "Resident in India" means a person who has stayed in India for a period of not less
than 182 days during the immediately preceding one calendar year.
2. Nominee for the Shareholder:
The Shareholder shall nominate another person who shall become the shareholders in case of death/incapacity of the
original shareholder. Such nominee shall give his/her consent and such consent for being appointed as the Nominee
for the sole Shareholder. Only a natural person, who is an Indian citizen and resident in India shall be a nominee
for the sole member of a One Person Company.
3. Director:
Must have a minimum of One Director, the Sole Shareholder can himself be the Sole Director. The Company may
have a maximum number of 15 directors.

Terms and Restrictions of OPC


1. A person shall not be eligible to incorporate more than a One Person Company or become nominee in more
than one such company.
2. Minor cannot shall become member or nominee of the One Person Company or can hold share with
beneficial interest.
3. An OPC cannot be incorporated or converted into a company under Section 8 of the Act. [Company not for
Profit].
4. An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of
any body corporate.
5. An OPC cannot convert voluntarily into any kind of company unless two years have expired from the date
of incorporation of One Person Company, except threshold limit (paid up share capital) is increased beyond
Rs.50 Lakhs or its average annual turnover during the relevant period exceeds Rs.2 Crores i.e., if the Paid-
up capital of the Company crosses Rs.50 Lakhs or the average annual turnover during the relevant period
exceeds Rs.2 Crores, then the OPC has to invariably file forms with the ROC for conversion in to a Private
or Public Company, with in a period of Six Months on breaching the above threshold limits.

Steps to Incorporate One Person Company (OPC)


1. Obtain Digital Signature Certificate [DSC] for the proposed Director(s).
2. Obtain Director Identification Number [DIN] for the proposed director(s).
3. Select suitable Company Name, and make an application to the Ministry of Corporate
Office for availability of name.
4. Draft Memorandum of Association and Articles of Association [MOA & AOA].
5. Sign and file various documents including MOA & AOA with the Registrar of
Companies electronically.
6. Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp Duty.
7. Scrutiny of documents at Registrar of Companies [ROC].
8. Receipt of Certificate of Registration/Incorporation from ROC.
One Person Company (OPC): Process of Registration

1. Apply for DSC: The first Step is to obtain the Digital Signature Certificate (DSC) of the
proposed Director which required the following documents:

 Address Proof
 Aadhaar card
 PAN card
 Photo
 Email Id
 Phone Number

2. Apply for DIN: Once the Digital Signature Certificate (DSC) is made, the next step is to
apply for the Director Identification Number( DIN) of the proposed Director in Form DIR – 3
along with the name and the address proof of the director.

3. Name Approval Application: The next step while incorporating an OPC is to decide on the
name of the Company. The name of the Company will be in the form of “ABC (OPC) Private
Limited”. We have to file INC – 1 for the name approval to the Ministry of Corporate Affairs
(MCA) by giving 6 names in the order of the preference along with the significance of keeping
that name. Once the name is approved by the MCA we move on to the next step.

4. Documents Required: We have to prepare the following documents which are required to be
submitted to the ROC:

 The Memorandum of Association (MoA) which are the objects to be followed by the Company
or stating the business for which the company is going to be incorporated
 The Articles of the Association (AoA) which lays down the bylaws on which the company will
operate.
 Since there are only 1 Director and a member, a nominee on behalf of such person has to be
appointed because in case he becomes incapacitated or dies and cannot perform his duties the
nominee will perform on behalf of the director and take his place. His consent in Form INC – 3
will be taken along with his PAN card and Aadhar Card.
 Proof of the Registered office of the proposed Company along with the proof of ownership and
a NOC from the owner.
 Affidavit and Consent of the proposed Director of Form INC -9 and DIR – 2 resp.
 A declaration by the professional certifying that all compliances have been made.

5. Filing/Approval of forms with MCA: All these documents will be attached to Spice Form,
Spice MOA and Spice AOA along with the DSC of the Director and the professional, and will be
uploaded to the MCA site for approval.

After uploading, Form 49A and 49B will be generated for the PAN and TAN generation of the
Company which have to be uploaded to MCA after affixing the DSC of the proposed Director

6. The issue of the certificate of Incorporation: On verification, the Registrar of Companies


(ROC) will issue a Certificate of Incorporation and we can commence our business.

Frequently Asked Questions (FAQs)


1. Who is eligible to act as a member 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.

2. A person can be member in how many OPCs?

A person can be a member of only one OPC.

3. Is there any tax advantage on forming an OPC?

There is no specific tax advantage to an OPC over any other form. The tax rate is flat 30%, other
tax provisions like MAT & Dividend Distribution Tax applies as they apply to any other form of
company.

4. Is there any threshold limits for an OPC to mandatorily get converted into either private
or public company?

In case the paid-up share capital of an OPC exceeds fifty lakh rupees or its average annual
turnover of immediately preceding three consecutive financial years exceeds two crore rupees,
then the OPC has to mandatorily convert itself into a private or public company.
5. What is the mandatory compliance that an OPC needs to observe?

The basic mandatory compliance are:-

 Maintenance of proper books of accounts


 Statutory audit of Financial Statements
 Filing of business income tax return every year before 30th September
 Filing Annual ROC return which includes form MGT 7

6. Who cannot form a One Person Company?

 A minor shall not eligible becoming a member


 Foreign citizen
 Non Resident
 Any person incapacitated by contract

7. How do I convert an OPC to a Private limited company?

Mandatory Conversion of One Person Company (OPC) to Private Limited Company (PLC) is
required in case a One Person Company meets certain parameters, like:

a) Effective date of increase in the paid-up share capital of a One Person Capital beyond rupees
fifty lakhs, AND

b) An increase of average annual turnover during the period of immediately preceding three
consecutive financial years is beyond rupees two crores.

In the above case, the One Person Company shall be mandatorily required to convert itself into
either a private or a public company Within a Period of Six Months. In this article, we look at the
procedure for conversion of one Person Company into a private limited company or limited
company.

Voluntary Conversion of OPC to Private Limited Company:-

 When a One Person Company gets incorporated, it cannot convert itself to Private or Public
company for a period of not less than two years from the date of incorporation
 If the time period has elapsed and two years time period is over, a One Person Company can
apply for converting itself to Private Limited Company or Public limited company
 The Conversion process should be done as per the rules and regulations laid down by the
Companies Act, 2013 under Section 18, and Rule 7(4) of the Companies (Incorporation) Rules,
2014