FAQ’s on OPC Company (One person Company)

By / / Companies Act

1. What is a one-person company?

  • One Person Company means a company which has only one person as a member. (Section 2(62) of the Companies Act, 2013)
  • Section 3 of the Act indicates that OPC is also a private limited company meaning all the characteristics of a private limited company shall apply to a OPC too.

2. Who is eligible to become a member of an OPC?

  • A natural person who is an Indian citizen whether resident in India or otherwise shall be eligible to incorporate a One Person Company.

3. Does a OPC have perpetual succession?

  • A OPC is essentially a private limited company with only one member/shareholder.
  • Since it is a private limited company, it has perpetual succession. The single member is required to appoint a nominee who will take over the reign in case of death or incapacity of the member.

4. Is it mandatory for a member of a OPC to appoint a nominee?

  • Yes, it is mandatory for a member of a OPC to appoint a nominee.

5. Can a person act as a member of more than one OPC at the same time?

  • No, a person cannot act as a member of more than one OPC at any point of time
  • Further, a person can also not act as a nominee of more than one OPC

6. What if a member becomes a member of 2 OPC’s – a situation wherein he becomes a member of one OPC by virtue of being a nominee after death of a member and of a OPC in which he is actually a member?

  • He/she shall withdraw his membership from any one of the OPCs within 180 days.

7. Can a minor become a member or nominee of an OPC?

  • A minor cannot become the member or nominee of an OPC or can hold shares of a OPC with beneficial interest.

8. What is the threshold limit at which an OPC mandatorily gets converted to a public company or private company?

  • There is no threshold limit for conversion of an OPC to a public limited or a private limited company.
  • Provisions relating to minimum paid up capital that warranted compulsory conversion of a OPC has been removed in the Companies (Incorporation) Second Amendment Rules, 2021.

9. What are the restrictions of an OPC?

  • OPC cannot be converted into a Section 8 company.
  • OPC cannot carry out Non-Banking Financial activities including investment in securities of any body-corporate.

10. Annual compliance of a OPC

  • An OPC is required to hold at least one Board meeting in each half of the calendar year and the time gap between the two Board meetings shall not exceed 90 days.
  • E form AOC -4 to be filed with ROC within 180 days from the close of the financial year. (AOC 4 is an annual financial report containing balance sheet, P&L, auditors report)
  • Form MGT 7A to be filed with ROC within 60 days from the date of the AGM. (MGT 7A is an annual return that contains details of directors and shareholders). (Refer FAQ 11 and 12)
  • Income Tax return within 31st October of the following financial year.
  • Tax audit report in Form 3CA-3CD if the turnover crosses the prescribed limit as given in the Income Tax Act, 1961 on or before 30th September of the following financial year.

11. Is it mandatory for a OPC to hold an AGM?

  • It is not mandatory for a OPC to hold an annual general meeting.

12. When it is not mandatory for a OPC to have AGM, what is the due date for filing MGT 7A?

  • If AGM is not held, the due date to file Form MGT 7A is 60 days from the calculated due date of AGM.
  • Calculated due date of AGM = completion of 6 months from the end of the financial year.

13. Who is required to verify the annual return of an OPC?

  • Annual Return of an OPC shall be signed by the Company Secretary or where there is no Company Secretary by the director of a company.

14. What is Form INC-4?

  • Form INC-4 is filed with the Registrar when the nominee of an OPC takes the place of the sole member of an OPC in the event of his death or incapacity to enter into a contract.
  • Such a form is required to be filed within 30 days of change in membership with the prior written consent of the person so nominated in Form INC-3.

15. How is an OPC converted to a private company or public company?

  • An OPC can be converted into a private company or public company other than a company registered under section 8 of the Act in the following manner:
    1. By increasing the minimum no. of members and directors to 2 or 7 members and 2 or 3 directors, as the case maybe and
    2. By maintaining the minimum paid up share capital as per the requirements of the Act for such company including due compliance of section 18 of the Act for such conversion.
    3. E-Form INC-6 shall be filed for conversion of OPC into a private/public company.

16. What are some of the exceptions given to an OPC?

  • An OPC is exempted from preparing and disclosing a Cash Flow Statement as part of its financial statement.

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