One Person Company

One Person Company & Its Annual Compliances

What is One Person Company?

One Person Company is a type of Private Company that has only one person as a member.

Prior to the coming of this concept minimum of 2 people was required to incorporate a company but the Companies Act, 2013 came up with the provision of OPC to provide advantages to Start-ups & Innovators in the country.

As per Rule 3 of the Companies (Incorporation) Rules, 2014,

  1. Only a natural person who is an Indian citizen, whether resident in India or not, shall be eligible to incorporate a One Person Company or shall be a nominee for the sole member/subscriber of a One Person Company.

Resident in India here means a person who has stayed in India for a period of not less than 120 days during the immediately preceding financial year.

  1. A natural person shall not be a member of more than a One Person Company and the said person shall not be a nominee of more than 1 One Person Company.
  2. No minor shall be eligible to become a member or nominee of a One Person Company or can hold a share with beneficial interest.
  3. A One Person’s Company cannot be incorporated or converted into a Company under Section 8 of the Act.
  4. A One Person Company cannot carry out Non-Banking Financial Investment Activities including investment in securities of anybody corporate.
  5. Member of One Person Company shall nominate a person, after obtaining the written consent of such person, which shall be filed in the form of a declaration in Form No. INC.4, who shall in the event of a member’s death or incapacity to contract, become a member of the One Person Company.

A One Person Company must do the following Annual Compliances

 

Forms Particulars Due Dates
AOC-4 Filing Of Profit & Loss Statement, Balance Sheet, Auditor’s & Director’s Report Within 180 days from the closure of the financial year
MGT-7A Annual Return Within 60 days from the member’s approval for adoption of Financial Statements.
ADT-1 Appointment of Auditor Within 15 days from the date of the appointment
MSME -1 Half-yearly return w.r.t outstanding payments to Micro Small & Medium Enterprises 30th April and 31st October
DPT-3 Return of Deposits Before 30th June
DIR -3 KYC KYC of Directors Before 30th September
MBP-1 Disclosure of interest by directors In the 1st Meeting of the Board of Directors every year, or whenever there is any change, the 1st board meeting is held after such change.

 

Apart from the above-mentioned compliances, there are some other compliances as well which an OPC must adhere to –

  • Board Meetings–  As per Section 173, an OPC shall hold at least 1 Board Meeting in each half of the calendar year, and the gap between the two meetings is not less than 90 days. However, provisions of this section do not apply to OPC having only 1 director on its Board.

Now, let’s discuss the process of conversion of a One Person Company into a Private or Public Company

  1. OPC shall alter its memorandum and articles by passing a resolution to give effect to the conversion and make necessary changes incidental thereto.
  1. One Person Company shall also increase the number of members to two or seven, as the case may be.
  1. The company shall apply e-form no. INC-6 with altered e-MOA & e- AOA, along with fees.
  1. On being satisfied, the Registrar shall approve the form and issue a certificate.

Conversion of Private Company into One Person Company

  1. A Private Company can also convert itself into a One Person Company after passing a Special Resolution in the general meeting, a copy of which shall be filed with Registrar in Form No. MGT-14
  2. The company shall also obtain a No Object Certificate from members and Creditors.
  3. The company shall apply e-form no INC-6 with -altered e-AOA & e-MOA, -a copy of NOC for every creditor, and an affidavit of directors confirming that members have given their consent for conversion.
  4. On being satisfied Registrar shall approve the application and issue a certificate.

OPC is formed with a single person as a member under the Companies Act, 2013. The above-given compliances should comply by every OPC. Delays in filing compliances would result in heavy penalties. There are many benefits of filing compliance are:

  1. To avoid heavy penalties.
  2. OPC will get loans, finances, and subsidies easily
  3. And filing compliances is also necessary for the active status of the company

So, OPC should file its compliances on time.

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