Types & Features of One Person Company

Types & Features of One Person Company

One Person Company(OPC) has the blended features of a sole proprietorship and a private company. OPC is also known as a one-man company. Like a sole proprietorship allows you to own the firm completely, an OPC also has just one shareholder. But unlike a sole proprietorship, in an OPC the owner has limited liability and the burden of outstanding debts does not fall on the owner, as an OPC is treated as a separate entity. Now, let’s see the features and the types of one-person companies.

Important Features of OPC

The following are some important features of OPC: 
  1. As the name suggests, One Person Company has only one person as the member or shareholder.
  1. Registration of OPC can only be done as a private company
  1. The company can have only one shareholder but can have up to 15 directors, and the number can be increased with a resolution.
  1. An OPC can be either a company limited by grants or a company limited by guarantee or an unlimited company
  1. An OPC to be registered as a limited by shares company shall have to comply with the following requirements:
  1. Paid-up capital of a minimum of ₹1 Lakh
  1. The OPC should have in place restrictions for the transfer of shares
  1. The OPC has to prohibit any invitations to the public for subscribing to the securities of the company.
  1. The company must provide for itself a legal identity by specifying a name under which the business could carry out its activities.

Types of One Person Company You Can Incorporate Under the Act

A company can be
  1. A company limited by shares, or
  1. A company limited by guarantee, or
  1. An unlimited company
 Therefore as per the Companies Act of 2013, there are five types of OPC you can establish. They are:
  1. OPC Limited by Shares
  1. OPC Limited by Guarantee with Share Capital
  1. OPC Limited by Guarantee without Share Capital
  1. Unlimited OPC with Share Capital
  1. Unlimited OPC with Share Capital

 

Eligibility Criteria for the Shareholder and Nominee Member of OPC

  1. The person who wishes to be the shareholder or nominee for the OPC should be a natural or real person. This means, unlike other companies in which a corporation can become a shareholder of a company, in an OPC the shareholder and the nominee have to be a real people.
  1. The person should not be a minor
  1. The person has to be an Indian citizen and a resident of India. As per the Act, a resident of India is a person who has stayed in India for not less than 120 days in yeh preceding financial year.
  1. A person can be a member or nominee to only one OPC at a time. In case a person acquires membership or nomination to more than one OPC by virtue, he or she has to give up either of them within 180 days.
 

Created & Posted by Pooja

Income Tax Expert at TAXAJ

 

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