A one person company (OPC) is a private organization that has only one shareholder as well as one director. This concept was introduced in India by the Companies Act, 2013 (2013 Act). Section 2(62) of the 2013 Act defines OPC as, “a company which has only one person as a member”. The concept of OPC combines the benefits of registering a Company as private and yet one person can claim all its shares. The owner of the company should be resident citizen of India and should not be a minor. Further, no person is eligible to incorporate more than a One Person Company or become nominee in more than one such company.
Method of Incorporation:-
The procedure of incorporation of Private Limited/Public Limited/ OPC can be explained as under:-
- Obtain Director Identification Number [DIN] for the proposed Director(s): DIN is a unique identification number issued by the Ministry of Corporate Affairs for an existing Director or a person intending to become a Director of a Company. DIN can be obtained by filling in the DIR-3 Application along with the following documents: Identity Proof (Copy of PAN Card), Address Proof (Copy of Passport/Election/Voter ID/ Driving Licence/ Aadhar Card/ Electricity Bill/etc.), Passport size photograph (one, recent), Current Occupation, email address of the Applicant, Contact Number and Educational Qualification. The DIR-3 has to be digitally signed by the Applicant.
- Obtain Digital Signature Certificate [DSC] for the proposed Director(s): DSC is equivalent (electronic format) of physical or paper certificate. Since the Ministry of Corporate Affairs accepts electronic submission of Forms on its website, the DSC is mandatory for all the users. It can be obtained by submitting a completely filled DSC application along with all documents as required for DIS-3.
- Select suitable Company Name, and make an application to the Ministry of Corporate Office for availability of name: After drafting of the main object of the proposed Company, the Applicant is required to file e-form INC-1 (Application for Reservation of Name) with the Registrar of Companies.
- Drafting of Memorandum of Association (MOA) and Articles of Association (AOA): After the selection of suitable name, MOA and AOA have to be drafted. Memorandum and articles of association of the company shall be signed by each subscriber to the memorandum who shall mention his name, address, description and occupation, if any, in the presence of at least one witness who shall attest the signature and shall likewise sign and add his name, address, description and occupation, if any. The witness shall be a practicing professional viz. practicing Company Secretary, Practicing Cost & Management Accountant, or practicing Chartered Accountant. Further, in case of OPC, the subscriber its memorandum shall nominate a person, after obtaining written consent of such person, who shall, in the event of subscriber’s death or his incapacity to contract, become the member of that one person company.
- Sign and file various documents including MOA & AOA with the Registrar of Companies electronically/Filing e-form:The following forms are required to be filed with the Registrar of Companies: Form No. INC-7 (declaration of compliance with the requirements of the Act on application for registration of a company), Form No. INC – 22 (notice of situation of registered office), Form No. DIR – 12 (appointment of directors of the company), and a Power of Attorney to be executed by subscribers and proposed directors (authorization by the promoters of the company to a person/s to carry out appropriate changes as suggested by the Registrar of Companies in any of the incorporation papers that have been filed). Form INC- 2 is the form for incorporation of ‘one person company’ which has to be submitted to the registrar along with the following attachments:- MOA, AOA, Proof of identity of member and nominee, residential proof of the member and the nominee, copy of PAN card of member and nominee, consent of nominee in form INC- 3, affidavit from the subscriber and first director to the memorandum in Form INC-9, list of all the companies (specifying their CIN) having the same registered office address, if any, specimen signature in form INC- 10, entrenched articles of association, proof of registered office address, copies of the utility bills. (not older than 2 months), proof that the company is permitted to use the address as the registered office of the company if the same is owned by any other entity/person, consent from the director, optional attachments.
- Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp Duty: After submission of documents, the applicant is required to submit the requisite fee and stamp duty.
- Verification of documents/forms by ROC: After payment of ROC fee and stamp duties, the ROC verifies/scrutinizes all the documents and may suggest a few changes to be made in the attachments/documents.
- Issuance of certificate of incorporation by ROC: After completion of all the formalities, the subscriber shall receive the final incorporation certificate from the Registrar of Companies. On receipt of such certificate, the business can be commenced.