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OPC Company Registration
MS Legal Associates:
The Companies Act 2013 is an Act of the Parliament of India which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company. The 2013 Act is divided into 29 chapters containing 470 sections as against 658 Sections in the Companies Act, 1956 and has 7 schedules. The Act has replaced The Companies Act, 1956 (in a partial manner) after receiving the assent of the President of India on 29 August 2013. The Act came into force on 12 September 2013 with few changes like earlier private companies maximum number of member was 50 and now it will be 200. A new term of "one person company" is included in this act that will be a private company and with only 98 provisions of the Act notified. On 27 February 2014, the MCA stated that Section 135 of the Act which deals with corporate social responsibility will come into effect from 1 April 2014. On 26 March 2014, the MCA stated that another 183 sections will be notified from 1 April 2014.
The Ministry of Company Affairs thereafter proposed a draft notification for exempting private companies from the ambit of various sections under the companies act.
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.
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.
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
A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.
Minor cannot shall become member or nominee of the One Person Company or can hold share with beneficial interest.
An OPC cannot be incorporated or converted into a company under Section 8 of the Act. [Company not for Profit].
An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
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)
Obtain Digital Signature Certificate [DSC] for the proposed Director(s).
Obtain Director Identification Number [DIN] for the proposed director(s).
Select suitable Company Name, and make an application to the Ministry of Corporate Office for availability of name.
Draft Memorandum of Association and Articles of Association [MOA & AOA].
Sign and file various documents including MOA & AOA with the Registrar of Companies electronically.
Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp Duty.
Scrutiny of documents at Registrar of Companies [ROC].
Receipt of Certificate of Registration/Incorporation from ROC.