BusinessFeatured

What Issues Arise During One Person Company Registration?

AN OPC or a One Person Company is a special kind of business model in which one person manages the entire operation of the business. The person is the sole owner of that One Person Company Registration. He is the company’s only member, stakeholder, and director. It is a limited liability firm where share transferability is restricted to be within the company. One can see this business model as a very successful replacement for a Sole Proprietorship.

If you want to register your business or proprietorship as a One Person Company registration, or if you want to alter the structure of the company post its Incorporation, then you must carefully read this article. We have detailed some of the important procedures that can come in handy to the people applying for OPC registration.

OPC Incorporation using SPICe form

  • First, the applicant for OPC registration must reserve their name using the RUN service at the MCA portal.
  • Then, apply for the Incorporation of the OPC. So, the applicant must file the form SPICe for the company’s Incorporation within 20 days from RUN’s approval.
  • Afterwards, the OPC registration applicant must file form INC-22 within 30 days once form SPICe is registered. This form is filed in case the correspondence and registered office addresses are different.

Who is eligible to act as a member of an OPC?

Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC.

For the above purpose, 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 financial year.

Membership

  • Only a natural person who is an Indian citizen and resident in India is eligible to act as a member and nominee of an OPC.
  • Note: The term “resident in India” means a person who has stayed in India for less than one hundred and eighty-two days immediately preceding the financial year.

Multiple OPC engagement

  • Suppose a natural person, being a member of One Person Company, becomes a member in another OPC because he is a nominee in that OPC.
  • In that case, such a person must meet the eligibility criteria of being a member in only one OPC within one hundred eighty days.
  • This means he must withdraw his membership from either OPCs within one hundred and eighty days. 

Change in Nominee

In an One Person Company registration, a nominee change can be filed in Form INC-4. In case of withdrawal of consent by the nominee or of intimation of change in nominee by the member, the OPC can file the application.

What if a member of an OPC becomes a member in another OPC by virtue of being a nominee in that other OPC?

Where a natural person, being member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days.

Change in Membership

  • If in a registered OPC, there is a need for change in membership, then they must file it to the Registrar of Companies (RoC) in the form INC-4.
  • In case of cessation of the member of OPC on account of death, incapacity to contract, or change in ownership, the company can file it in the INC form.
  • On the same lines, the registered OPC can provide details of its new member. 

Mandatory Conversion

  • Suppose the paid-up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover of immediately preceding three consecutive financial years exceeds two crore rupees. In that case, the OPC has to convert itself into a private or public company mandatorily.
  • So, the OPC must inform the RoC in form INC-5 if their threshold limit has exceeded. And they want to convert themselves into a private or public limited company.
  • The registered OPC can file the Form INC-5 within sixty days of exceeding threshold limits.

Also Read: TEC Certification in India: Why must Telecom products get it?

Conversion Process

If an One Person Company registration wants to file for the conversion, then they must file the conversion application in Form INC-6.

A Private Limited Company (PLC) can also file the form INC-6 for converting itself into an OPC.

  • For this, the paid-up share capital of a private company must not exceed fifty lakh rupees.
  • Also, the PLC must not have an average annual turnover of more than two crore rupees.
  • Lastly, the PLC must have one member.
  • Also, the PLC must appoint one nominee to act as a member. Iin case of death or incapacity of the member.
  • The applicant must file the Form INC-6 within
  • Thirty days in case of voluntary conversion
  • Six months of mandatory conversion.

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button