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Among all the other provisions of the new Act, entrepreneurs seemed sitting on the edge of their seats for this one. And why not? Let us tell you how and why in this Article. FAQs ON ONE PERSON COMPANY!!!


1) What is a One Person Company (OPC)?

A One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Section 2(62) defines One Person Company as a company which has only one person as a member.


2) What will be the form of One Person Company?

One Person Company will be formed as a “Private Limited Company”. It can be formed as company limited by share capital or limited by guarantee or unlimited company. The words “One Person Company” will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.


3) What is the minimum authorized capital for starting up a One Person Company?

The process of starting an One Person Company is the same as that of a general private limited company. Hence, the minimum paid-up and subscribed capital of the One Person Company would be   Rs. 1, 00,000.


4) What is the minimum number of directors and shareholders to form a One Person Company?

An One Person Company can be started with one director and shareholder only.


5) Who is a nominee in a One Person Company?<\strong>

A nominee is a person who in the event of death or disability of the subscriber of the One Person Company shall assume his position. Memorandum of Association of an One Person Company will mandatorily prescribe the name of the person.


6) Can I appoint my wife as my nominee for  my One Person Company?<\strong>

Yes. Anyone can be appointed as a nominee, provided he or she holds a correct PAN in his or her name.


7) Can a nominee of a One Person Company be changed after incorporating the company?<\strong>

Yes. A nominee can be changed at any time with due intimation to the Registrar.


8) How many One Person Companies can I form?<\strong>

One individual can form only one One Person Company.


9) Can a foreign national form an One Person Company?<\strong>

No. Only an Indian citizen and resident can form an One Person Company.


10) Does a nominee of a One Person Company need to acquire a DIN number as well?<\strong>

No. Nominee is only required to hold a valid PAN in his/her name.


11) Who can be appointed as a nominee for a One Person Company?<\strong>

For the purpose of starting up a One Person Company, only an individual (natural person) who is an Indian Resident and citizen   can be appointed as a nominee for the sole member of an One Person Company.


12) Who is considered as resident for the purpose of forming an One Person Company or being appointed as a nominee?<\strong>

For the purposes of this rule, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one calendar year.


13) In how many One Person Companies can a person become a nominee?<\strong>

A person can become a nominee in not more than 1 One Person Company.


14) Can a One Person Company be converted into a Section 8 company or any other company?<\strong>

No.  One Person Company cannot be converted into a Section 8 company. Further, One Person Company cannot be voluntarily converted into any other kind of company until the cooling period of 2 years is completed from the date of incorporation.


15) Who all are disqualified to form an One Person Company?<\strong>

Following persona are disqualified to form an One Person Company:

  • A minor.
  • A foreign citizen.
  • Non-Resident.
  • A person incapacitate to contract.
  • Any other person apart from living person.


16) Can a One Person Company engage in any form of business activities?<\strong>

An One Person Company can engage in any sort of business activities apart from Non Banking Financial Investment Activities including “investment” in securities of body corporates.



17) What is the process of appointing a nominee for the One Person Company?<\strong>

The name of the nominee should be included in the Memorandum of Association of the One Person Company. The sole member of the One Person Company will have to obtain a written consent from the nominee in Form INC. 3. This Form has to be submitted to the ROC alongwith Form INC.2 during its incorporation.


18) What will happen in case of death of the sole member of the One Person Company?<\strong>

In case the sole member of the One Person Company dies or is incapacitate by any disability, the nominee will assume the position of the member. Within 15 days of becoming the member, he will have to appoint a nominee for the One Person Company and intimate the ROC in Form INC.4 (alongwith Form INC. 3) within 30days of change in membership.


19) Is a One Person Company required to hold a Board Meeting?<\strong>

A One Person Company is required to hold a Board Meeting, if the numbers of directors are more than one.  It will be deemed to have complied with the provisions relating to Board Meetings, if at least one meeting is conducted in each half of the calendar year. However, the gap between the two meetings should not be less than ninety (90) days.


20) Is a One Person Company required to file its Annual return?<\strong>

Yes. The annual return of the One Person Company has to be signed by the sole member of the One Person Company.


21) Is One Person Company required to hold an AGM?<\strong>

Provisions of Annual General Meeting (AGM) and Extra-Ordinary General Meetings do not apply to a One Person Company.


22) When will a company cease to operate as an One Person Company?<\strong>

An One Person Company will cease to operate as an OPC where the paid up capital of an One Person Company exceeds  Rs.50 lacs or its average annual turnover during the relevant period  exceeds Rs.2 Crores, it shall cease to continue as a One Person Company.


23) Can a private company convert itself into a One Person Company?<\strong>

A private company can convert itself into a One Person Company provided it satisfies the following conditions:

  • It must have a paid up capital of Rs. Fifty Lakhs or less;
  • It must have its average annual turnover of Rs. 2 crores or less.


24) How can a private limited company be converted into a One Person Company?<\strong>

A private limited company has to obtain a No Objection in writing from members and creditors prior to its conversion.

Post obtaining the same, it will have to pass a Special Resolution in the General Meeting.

The One Person Company shall file file copy of the Special Resolution with the Registrar within thirty days from the date of passing such resolution in Form No. MGT 14.

The company shall file an application in Form No. INC. 6 for its conversion into One person Company.

A company form of business generally meant to bring forward two members at least for better degree of control over management. However, these intentions were wildly destroyed when people started bringing in members just for the sake of maintaining the minimum statutory limits. Also, for an entrepreneur, this seemed to be an inhibiting factor. Hence, the New Act brought about this new rationale of an One Person Company. This model gives an entrepreneur the necessary and much sought out freedom from the shackles of the risks and uncertainty of a sole proprietorship business. This Article is meant to furnish you with the FAQs ON ONE PERSON COMPANY!!!!. There is more to come in coming days. Till then…enjoy browsing!