Definition and meaning of One Person Company (OPC)
The term ‘one person company’ has been defined under Section 2(62) of Companies Act, 2013. As per this, ’One Person Company’ means a company which has only one person as a member. It is basically a Private Company with some unique features.
As regards the name of a One Person Company, the Act provides that the words “One Person Company” or ‘OPC’ shall be mentioned in brackets below the name of such Company, wherever its name is printed, affixed or engraved.
The concept of OPC provides a more flexible structure and less compliance requirements of a Company
Logic and Advantages of New Concept OPC
To encourage unorganized proprietorship business to enter into organized corporate world, the concept of “one person company ’OPC’ was recommended by J J Erani Committee. As the name suggests, it means a company which has only one person as member.
The concept is widely accepted in countries like China, Pakistan, Singapore, US. In the case of India, If you wish to set up a private company minimum two shareholders are required. In many cases, because of this legal requirement a second shareholder is forcefully roped in. This second shareholder at times take advantage of his position. Having recognized this problem the concept of OPC has been introduced.
Because much public interest is not involved, many relaxations have been granted to OPC in compliances and procedural aspects. Some of silent feature of an OPC and the privileges it enjoys are as follows:
- An OPC is primarily a private company. However, certain provisions which are applicable to a private company will not apply to an OPC. For instance, onIy one director is sufficient (as against two in the case of private company).
- OPC is not required to hold annual general meeting.
- Information to be provided in the directors’ report (Section 134) has been significantly reduced (as compared to a private company).
- Annual return (Section 92) in other companies shall be signed by director and company secretary and in case of no company secretary by a practicing company secretary whereas in the case of OPC annual return shall be signed by Company secretary and in case of his absence it will be signed by director of the company.
- The requirement of a minimum number of Board meetings to be convened shall not apply to an OPC having one director. However, in case of OPC having more than one director, the OPC shall hold at Least one meeting of the Board of directors in each half of calendar year and the gap between two meetings is not less than ninety days.
Documents/Checklist for a One person Company
Copy of Aadhaar of all Partners (both side)
Copy of PAN
Driving License OR Voter ID card OR Passport
Bank Account Statement Updates
Mobile Number
Email ID of all promoters and directors
Passport Size Photograph of all promoters and directors
Address Proof for Registered Office (Electricity Bill not more than 1 month)
Name of Company
Qualification of Promoter
Paid-up Capital of Company
Specimen Signature of One Director
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Benefits of the Private Limited Company
Limited liability
A company limited by shares is a registered company having the liability of its members limited to the amount, if any, unpaid on the shares respectively held by them. If his shares are fully paid-up, he has nothing more to pay.
Perpetual Succession
An incorporated company never dies. Perpetual succession, therefore, means that the membership of a company may keep changing from time to time but does not affect its continuity. Members may come and members may go out but the company can go forever.
Separate Management
No member can claim himself to be the owner of the company’s properties either during its existence or in its winding up. A member does not even have an insurable interest in the property of the company.
Transferability Of Shares
The capital of accompany is divided into parts called shares. The shares are said to be moveable property and subject to certain conditions, freely transferable for that. No shareholder is permanently or necessarily wedded to a company. It may be noted that this right of shareholder is restricted in the case of a private company.
Capacity To Sue And Be Sued
A company, being a body corporate, can sue and be sued in its own name.
Contractual Rights
A company, being a legal entity different from its members, can enter into contract for the conduct of the business in its own name. A member of a company cannot sue in respect of torts committed against it, nor can be sued for torts committed by the company.
Separate Property
The members of a company may derive profits without being burdened with the management of the company. The company is administered and managed by its own managerial personnel.
Termination of existence
It has the existence only in contemplation of law. It is created by law, carries on its affairs according to law throughout its life and ultimately is affected by law. Generally, existence of a company is terminated by means of winding up.