One Person Company’ (OPC) has been introduced by the Companies Act, 2013. OPC will give the young businessman all benefits of a private limited company which categorically means they will have access to credits, bank loans, limited liability, legal protection for business, access to market etc all in the name of a separate legal entity. OPC is a Private Company for all the legal purposes with only one member. Indian who is also a resident of India is eligible to incorporate an OPC.
An OPC can be formed under any of below categories:
- Company limited by guarantee
- Company limited by shares
The member of an OPC has to nominate a nominee with the nominee’s written consent, and file it with the Registrar of Companies (RoC). This nominee in the event of death or in event of any other incapacity, shall become a member of an OPC. The member of an OPC at any time can change the name of the nominee providing a notice to the RoC in such manner as prescribed. On account of Death of a member, the nominee is automatically entitled for all Assets and liabilities of OPC.
Mandatory conversion to Private Limited or Public Limited
- If paid up share capital of an One Person Company exceeds fifty lakh rupees or its average annual turnover during the relevant period exceeds two crore rupees, it shall cease from the status of One Person Company. It shall be required to convert itself into a private or public limited company within six months of the date on its paid up capital increased beyond Rs.50,00,000/- or last day of the relevant period i.e to say 31st March. during which its average annual turnover exceeds Rs. 2,00,00,000/-