Incorporation of a One Person Company under Section 2(62) of the Companies Act 2013, enabling a sole promoter to operate through a limited-liability corporate vehicle.
A One Person Company (OPC) is a class of private limited company introduced by the Companies Act 2013, having a single shareholder. It allows a sole promoter to enjoy the benefits of limited liability and separate legal personality without the requirement of a second shareholder.
The promoter is required to nominate a person who, in the event of the promoter's death or incapacity, will become the member of the OPC. The nominee must be an individual resident in India and must consent to the nomination.
The OPC structure is suited to solo founders who require limited liability but do not yet require, or wish to involve, additional shareholders. Once turnover or paid-up capital crosses prescribed thresholds, the OPC is required to convert to a private or public limited company.
Engagements in this area generally involve some or all of the following work. The actual scope is set out in the engagement letter once the matter is understood.
Discussion of the promoter's business plans, eligibility, and the proposed nominee.
Collection of identity, address and photograph documents from the promoter and the nominee, procurement of DSC and DIN.
Preparation of the MOA, AOA, nominee consent in INC-3, and all SPICe+ linked forms.
Electronic filing of SPICe+ with the Registrar of Companies, accompanied by government fees and stamp duty.
Issuance of the Certificate of Incorporation, PAN and TAN. The OPC may commence business after filing Form INC-20A.
The Registrar of Companies typically issues the Certificate of Incorporation within seven to twelve business days of filing.
Only an individual who is resident in India (present in India for not less than 120 days during the preceding financial year) may incorporate or be the nominee of an OPC. A person may be member of only one OPC at a time.
An OPC is required to convert to a private or public limited company if its paid-up share capital exceeds Rs 50 lakh or its average annual turnover during the relevant period exceeds Rs 2 crore.
The nominee, on the promoter's death or incapacity, becomes the sole member of the OPC. The nomination may be changed by the promoter at any time by following the prescribed procedure.
An OPC may not carry out non-banking financial investment activities or invest in securities of any body corporate.
A sole proprietorship is not a separate legal entity. The proprietor is personally liable for the debts of the business. An OPC is a body corporate with separate legal personality and limited liability for its sole member.
Yes. An OPC may have up to fifteen directors, but only one shareholder. The shareholder is typically also a director.
No. Only an individual who is a citizen and resident of India is eligible to incorporate an OPC.
Yes. An OPC is required to have its accounts audited annually, irrespective of turnover.
On crossing the thresholds of Rs 50 lakh paid-up capital or Rs 2 crore average turnover. Voluntary conversion is permitted after two years from the date of incorporation.
Every engagement begins with a confidential consultation. Schedule one to understand the scope, approach and fees for your specific matter.
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