One Person Company (OPC) is a new concept in India, and it enjoys all the benefits of a Pvt. Ltd. Company. With this a single person can also start a Pvt. Ltd. company, earlier minimum of 2 people were required to form a Pvt. Ltd. company
Advantages of a One Person Company
- Limited Liability
- Lesser compliance
- Perpetual Status
- The exit route is easy by the transfer of the shares.
Who can form a One Person Company
- Only an individual can form an OPC
- He/she should not be a minor
- He should be an Indian citizen.
- He should be an India resident; an NRI cannot create an OPC
Limitations of an OPC
- One Nominee has to be appointed; legal heirs don't get the nominee status by default.
- The Nominee can also be changed in the due process.
- One person can be a member or Nominee of anyone OPC only.
- Paid-up share capital needs to be less than or equal to 50 lacs.
- The average annual turnover should be less than or equal to 200 lac(2 Cr.) in the last three consecutive years.
- If any of the above two conditions exceed their limit, one needs to change it into a Pvt. Ltd. Company within six months.
- At any point in time, if your wish to change an OPC to a Pvt. Ltd. company voluntarily, then you need to wait at least two years from the date of incorporation.
- A maximum of 15 directors can be added to an OPC
- A nominee has no role in the company until the death of the member or member being incapable of executing a contract.
- Investors are now allowed to in an OPC.
The requirement to form an OPC
- Digital Signature
- Director Identification Number (DIN)
- Name approval
- Memorandum and Articles of Association
- KYC documents
- Ownership proof of Registered Office(Rent Agreement, Electricity Bill, Phone Bill)