Features of One Person Company
Member of the Company
· First and foremost is that the company shall have only one member. Member is defined as a shareholder or a person who agrees in writing to become a shareholder or the subscriber of MoA who has agreed to become the member of the company.
· The member of the company shall always be a natural person. Thus, a company, which is an artificial person, cannot incorporate OPC as a subsidiary or holding company.
· The natural person who will be the member of the company shall have to be an Indian citizen and a resident of India (a resident of India means a person who has stayed for 182 in the immediately preceding financial year).
· He shall be a major because he would be the person to enter into a contract on behalf of the company and thus will be liable in breach of the contract. Indian Contract Act specifies that a person entering into a contract shall be a major.
· The member of the company shall have only one OPC in his name. The member cannot be a shareholder of more than one OPC simultaneously.
Directors of the company
Every company shall have directors. Minimum of two directors in case of private company and minimum of three directors in case of public company. OPC shall have minimum of one director and maximum of 15 directors. The member of the company shall be its first director which shall also be mentioned in MoA.
Naming of OPC
Section 12 of the Companies Act, 2013 deals with naming of a company, that is, whether it is a public company or a private company, it should be mentioned wherever the name of the company is used. The same is in the case of OPC as well, that is, under the name of the company, ‘One Person Company’ should be written in brackets, whether the name is printed or affixed or engraved.
Nominee of the company
Company has a feature of perpetual succession. In any other company, on the demise of the member or his incapacity to act as a member, then the legal representatives of the incapacitated member shall replace and carry over the business. But, it is not in the case of OPC, as a member can have more than one legal representative, on the incapacity of the member to act, all the legal representatives cannot act as members of OPC, if such were the case, then the whole purpose of OPC is eliminated.
As the definition itself suggests, OPC is a company which has only one member. Thus, a nominee has to be nominated in the case of death of the existing member or incapacity of the member to carry on the business any more. In such cases, the existing member shall have to nominate a person as the member of the company. This shall happen only with the written consent of the nominee according to the form INC-3 which is regarding the nominee of a one person company.
The nominated member can withdraw from the nominee himself. He has to communicate this to the existing member who shall then within 30 days communicate it to the company, that is, the board of directors; And the same procedure in case of change of the nominee. It shall later have to be mentioned in the memorandum and shall also have to be informed to the registrar of companies.
Annual returns
Section 92 of the 2013 Act provides that annual returns shall have to be filed at the end of every financial year. Annual returns is the document which contains the record of its composition, turn over, profit, members etc. in that specific financial year. This document shall have to be signed by a director and the company secretary. But, in the case of OPC, it shall have to be signed by either the company secretary or a director and not both. The report of board of director also includes a snippet of the annual returns. Then, it shall be submitted to the registrar.
Meetings
· Section 96 of the Act provides for conducting annual general meeting within the prescribed time limit. But, this is not a mandate for OPCs as they are specifically excluded from conducting general meeting after every financial year.
· Section 173(5) of the Act provides for conducting board meetings in the case of OPC, where there are more than one director, a board meeting shall have to be conducted in every six months of the calendar year and the gap between the meetings should not be less than ninety days.
· The resolution of the general meetings is deemed to be accepted or passed when it has been passed by the sole member of the company and this shall later be communicated to the company, that is, the board of directors. This resolution shall be later entered in the minutes book maintained and shall be signed by the member himself.
Created & Posted by (Anuj)
CA-Article at TAXAJ
TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/Business, Trademark & Brand Registration, Digital Marketing, E-Stamp Paper Online, Closure of Business, Legal Services, Payroll Services, etc. For any further queries related to this or anything else visit TAXAJ
TAXAJ Corporate Services LLP
Address: 1/11, 1st Floor, Sulahkul Vihar, Old Palam Road, Dwarka, Delhi-110078