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)
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