Insights & Research
Sr. Consultant, Legacy Partners
Imagine that you have an amazing idea of business, a single man with humble resources want to leverage the advantages of forming a trend setting company. Is there anything beyond sole-proprietorship?
The answer is a big yes. Here comes the Companies Act 2013 with revolutionary concept of One Person Company (OPC). The concept of OPC is not new, it was introduced since a very long time back in UK and European countries it was and recommended by JJ Irani committee in the year 2005.
For those enthusiastic entrepreneurs who aspire to form an organized business, OPC brings in platter new bracket of opportunities with relatively less stringent or simple legal regime. The benefits are:
A GLANCE AT THE DEFINITION OF OPC UNDER THE COMPANIES ACT, 2013:
It is defined under section 2(62) of the Companies Act, 2013.
“One Person Company” means a company which has only one person as a
Here is the opportunity to register an OPC as a Private Company with just 1 member and 1 director (both same) with a nominee. It may be formed as a Company limited by shares/guarantee or an unlimited liability company.
Only a natural person who is an Indian citizen and resident in India is eligible to incorporate an OPC or be a nominee of it.
Hi Minors, no chance for you! You need to wait to become major to become a member or a nominee.
Few of the benefits are:
The first OPC in India was incorporated on 28th April 2014 at Delhi under ROC- Delhi jurisdiction, the company name being, ‘Vijay Corporate Solutions OPC Pvt Ltd’
However, there are also some restriction and terms imposed on an OPC to make this concept more meaningful.
THE RELAXATIONS AVAILABLE TO OPC
Over the period, you wish to convert it into A PRIVATE or A PUBLIC LIMITED COMPANY. Here comes with two situations.
Voluntary Conversion: Apply after two years of incorporation following relevant section under Companies Act.
Compulsory Conversion: You have grown now. The trigger point is Paid capital equal to or more than Rs.50 Lakhs or its Annual turnover for the relevant financial year exceeds Rs.2 Crore. Then, compulsorily convert OPC into Private Limited Company or Public Limited Company as per Rule 7(4)
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