One Person Company-FAQS
ONE PERSON COMPANY
Companies Act, 2013 has provisions for one person company. Under these provisions even one person can open a company on his name, earlier minimum 2 people were required to open a private limited company.
What is the Definition of One Person Company as per companies act 2013?
Section 2(62) of the Companies Act, 2013 defines OPC to mean a Company which has only one person as a member.
It can have only one member at any point of time.
It may have only one director but can however appoint more than 15 directors after passing a special resolution.
As per section 3(1) and (2), OPC can only be incorporated as a private limited company. Such a company may either be:
1. a company limited by shares; or
2. a company limited by guarantee; or
3. an unlimited company
The words ‘‘One Person Company’’ is required to be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.
Who can form a One person Company, What are the eligibility createrias?
As per Rule 3(1) of the Companies (Incorporation) Rules 2014, only a natural person who is an Indian Citizen and resident in India shall be eligible to incorporate / form a OPC. Indian resident means who has stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.
- A nominee for OPC has to be natural person who is and Indian citizen and resident in India.
- No person shall be eligible to become a nominee in more than one OPC.
At the time of incorporation of OPC, the sole member of OPC is required to appoint another person as his nominee and his name shall have to be mentioned in the Memorandum of Association of the OPC.
Who can not become member of an one person company?
1. Minor (as per Rule 3(4) of the Companies (Incorporation) Rules 2014). A minor cannot even hold share with beneficial interest.
2. Foreign Citizen
3. Non Resident
4. A person incapacitated to contract
5. Persons other than a Natural Person i.e. living human being
How many Directors a One Man Company can have?
OPC can have one or more Directors on its board. As per the provisions of Sec 149 a OPC can have a maximum of 15 directors. It can, however appoint more than 15 directors after passing a special resolution.
IS One company Person Company required to file annual returns?
As per the proviso to section 92(1) of the Companies Act 2013, the annual return in case of OPC shall be signed by the company secretary or where there is no company secretary, by the director of the OPC.
Who can sign the financial statements of an One Person Company?
a. The financial statements of a one person company can be signed by one director alone.
b. Cash Flow Statement is not a mandatory part of financial statements for a One Person Company. [Section 2(40)]
c. Board’s report to be annexed to financial statements may only contain explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.
d. OPC should file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year.
Are Agm provisions applicable to OPC?
As per section 96(1) of the Companies Act 2013, the provision relating to holding of AGM is not mandatory for a OPC.
How many Board meeting an OPC should hold in a year?
-Atleast one Board Meeting must be held in each half of the calender year and the gap between the two meetings should not be less than ninety days.
For the purposes of holding Board Meetings, in case of a one person Company which has only one director, it shall be sufficient compliance if all resolutions required to be passed by such a Company at a Board meeting, are entered in the minutesâ€book, signed and dated by the member and such date shall be deemed to be the date of the Board Meeting for all the purposes under this Act.
Which Sections or provisions are not applicable to OPC?
As per Section 122, the following provisions shall not apply to a One Person Company:
Section 98 – Power of Tribunal to call meetings of members
Section 100 – Calling of extra ordinary general meeting
Section 101 – Notice of meeting
Section 102 – Statement to be annexed with 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 poll
Section 110 – Postal Ballot
Section 111 – Circulation of members’ resolution.
Source: Companies Act 2013 and internet