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One Person Company

Simpler legal and governance regime for


operation and maintenance
Waives a number of compliance requirements.
Lives on even after the death/disability of
the sole member
OPC registered with one member
Appointment of another person as a nominee
member in the event of the subscribers
death or his incapacity
Only natural person who is an Indian citizen
and resident in India is eligible to incorporate
OPC.
Types of OPC

a company limited by shares; or


a company limited by guarantee; or
an unlimited company.
Appointment of directors

Articles of a company may provide for the


appointment of the first directors
If articles are silent then the subscriber to the
memorandum who is an individual shall be
deemed to be the first director of the company
May have a single director
Maximum-15 directors more than 15 after
passing Special Resolution
Director must have stayed in India for a total
period of not less than 182 days in the
previous calendar year
Meetings of Board

At least one meeting of the Board of


Directors to conducted in each half of
a calendar year
Gap between the two meetings
should not be less than ninety days
Exemption if company has only one
director.
Contract by One Person
Company
One Person Company limited by shares or by guarantee
enters into a contract with the sole member of the
company who is also the director of the company, the
terms of contract or offer are in writing or contained in a
memorandum or recorded in the minutes of the Board
meeting held next after entering into the contact.

Inform the Registrar about every contract entered into


by the company within a period of fifteen days of the
date of approval by the Board of Directors.

Contracts in ordinary course of business not required to


comply with the above.
Financial Statement
The financial statement, signed by one director,
for submission to the auditor for his report
thereon.
Board of Directors Report means a report
containing explanations or comments by the
Board on every qualification, reservation or
adverse remark or disclaimer made by the
auditor in his report.
Filed with ROC within 180 days from the closure
of the financial year
Financial statement, may not include the cash
flow statement
Exemption
Section 96. Option to dispense with the requirement of holding an AGM
Section 98. Power of Tribunal to call meetings of members
Section 100. Calling of extraordinary general meeting.
Section 101. Notice of meeting.
Section 102. Statement to be annexed to notice.
Section 103. Quorum for meetings.
Section 104. Chairman of meetings
Section 105.Proxies
Section 106. Restriction on voting rights
Section 107. Voting by show of hands
Section 108. Voting through electronic means
Section 109. Demand for poll
Section 110.Postal ballot
Section 111. Circulation of members resolution
Restrictions
Such Company cannot be incorporated or
converted into a company under section 8 of the
Act.
Such Company cannot carry out Non-Banking
Financial Investment activities including
investment in securities of anybody corporates.
No such company can convert voluntarily into
any kind of company until expiry of 2 years from
the date of incorporation, except in cases where
capital or turnover threshold limits are reached.
No minor shall become member or nominee of
the One Person Company or hold share with
beneficial interest.
Conversion of OPC
Where the paid up share capital exceeds fifty lakh
rupees or its average annual turnover during the
relevant period exceeds two crore rupees

OPC to convert itself, within 6 months of the date


on which its paid up share capital is increased
beyond fifty lakh rupees or the last day of the
relevant period during which its average annual
turnover exceeds two crore rupees, into either a
private company with minimum of two members
and two directors or a public company with at
least of seven members and three directors in
accordance with the provisions of section 18 of the
Act
Conversion of private
company into One Person
Company
A private company other than a
company registered under section 8
of the Act may convert itself into OPC
by passing a special resolution in the
general meeting.
AND after obtaining a NOC from all
its members and creditors.
Other features of OPC
OPC to lose its status if paid up capital
exceeds Rs. 50 lakhs or average annual
turnover is more than Rs. 2 crores in 3
immediately preceding consecutive years.
Mandatory rotation of auditor after expiry
of maximum term is not applicable.
The annual return of a One Person
Company shall be signed by the company
secretary, or where there is no company
secretary, by the director of the company.
Small Company
The concept of Small Company has been
introduced for the first time by the
Companies Act, 2013.
The Act identifies some companies as small
companies based on their capital and
turnover for the purpose of providing
certain relief/exemptions to these
companies.
Most of the exemptions provided to a small
company are same as that provided to a
One Person Company.
Small Company - Section
2 (85)
A company, other than a public company,
1. paid-up share capital of which does not exceed Rs.
50 lakh or such higher amount as may be
prescribed which shall not be more than Rs. 5
crore; or
2. turnover of which as per its last P&L A/c does not
exceed Rs. 2crore or such higher amount as may
be prescribed which shall not be more than Rs. 20
crore
Provided that nothing in this clause shall apply to
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any
special Act;
Salient Features
Only a private company can be classified as a small
company.

Holding company, subsidiary company, charitable


company and company governed by any Special Act
cannot be classified as a small company.

For a small company, either the paid up capital should not


exceed Rs. 50 lakhs or the turnover as per latest
statement of profit & loss should not exceed Rs. 5 crores.

The status of a company as Small Company may


change from year to year. Thus the benefits which are
available during a particular year may stand withdrawn in
the next year and become available again in the
subsequent year.
Special Provisions and
Exemptions
Privileges/exemptions available to a small
company are same as OPC.

The annual return of a Small Company can


be signed by the company secretary
alone, or where there is no company
secretary, by a single director of the
company.

A small company may hold only two board


meetings in a year, i.e. one Board Meeting
in each half of the calendar year with a
minimum gap of ninety days between the
two meetings.
Special Provisions and
Exemptions
A small company need not include Cash Flow
Statement as a part of its financial statements.

Provision regarding mandatory rotation of auditor


not applicable to a small company.

Holding and subsidiary companies are specifically


excluded from the concept of small company.

In other words, a holding or a subsidiary company


can never enjoy the privileges of a small company
even though they may fulfill the capital or
turnover requirement of a small company.
Foreign Company
any company or body corporate
incorporated outside India which
has a place of business in India
whether by itself or through an
agent, physically or through
electronic mode; and
conducts any business activity in
India in any other manner.
Electronic Mode
Companies (Registration of Foreign Companies)
Rules, 2014
Electronic mode means carrying out electronically based,
whether main server is installed in India or not, including, but
not limited to
(i) B2B and B2C transactions, data interchange and other
digital supply transactions;
(ii) offering to accept deposits or inviting deposits or accepting
deposits or subscriptions in securities, in India or from citizens
of India;
(iii) financial settlements, web based marketing, advisory and
transactional services, database services and products, supply
chain management;
(iv) online services such as telemarketing, telecommuting,
telemedicine, education and information research; and
(v) all related data communication services,
whether conducted by e-mail, mobile devices, social media,
cloud computing, document management, voice or data
transmission or otherwise;
Application of Act to Foreign
Company
Where not less than fifty per cent of the
paid-up share capital, of a foreign
company is held by Indian citizen or
corporate whether singly or in the
aggregate, such company shall comply
with the provisions of the Act as may be
prescribed with regard to the business
carried on by it in India as if it were a
company incorporated in India.
Documents to be delivered to
Registrar
Within 30 days of the establishment of its place of business in
India, deliver to the Registrar for registration
a certified copy of the charter, statutes or memorandum and
articles, of the company in the English language OR a certified
translation thereof in the English language;
the full address of the registered or principal office of the
company;
a list of the directors and secretary of the company containing
such particulars as may be prescribed;
the name and address or the names and addresses of one or
more persons resident in India authorised to accept on behalf of
the company service of process
particulars of opening and closing of a place of business in India
on earlier occasion (s);
declaration that none of the directors of the company or the
authorized representative in India has ever been convicted or
debarred from formation of companies and management in India
or abroad
Accounts of Foreign
Company
In every calendar year make out a balance sheet
and profit and loss account
Documents relating to copies of latest
consolidated financial statements of the parent
foreign company
Statement of related party transactions
Statement of transfer of funds (including dividends
if any)
A copy of a list of all places of business
established by the company in India as at the date
Annual Return
Every foreign company shall prepare
and file, within a period of sixty days
from the last day of its financial year,
to the Registrar annual return along
with such fee and containing the
particulars as they stood on the close
of the financial year.
Display of Name
Name of Company and Country of
incorporation -

Outside every office in English and also


in the local language

All business letters, billheads and letter


paper, and all notices, and other official
publications of the company;
Other Compliances
Provisions of debentures

Provisions of annual return

Provisions of registration of charges

Provisions relating to books of account and


their inspection

Provisions of Inspection, Inquiry and


Investigation specified under Chapter XIV
Penalty
Fine not less than Rs. 1 lakh but which may
extend to Rs. 3 lakh

Continuing offence, with an additional fine which


may extend to Rs. 50,000 for every day after the
first during which the contravention continues

Every officer of the foreign company who is in


default shall be punishable with imprisonment for
a term which may extend to 6 months or with
fine which shall not be less than Rs. 25,000 but
which may extend to Rs. 5 lakh, or with both.
Penalty
Any failure shall not affect the validity of any
contract, dealing or transaction entered into
by the company or its liability to be sued in
respect thereof

Company shall not be entitled to bring any


suit, claim any set-off, make any counter-
claim or institute any legal proceeding in
respect of any such contract, dealing or
transaction, until the company has complied
with the provisions of this Act applicable to it.