opc under companies act, 2013 by ca. p.raja, partner partner p r n & associates, chennai e-mail...
TRANSCRIPT
OPC OPC UNDER COMPANIES UNDER COMPANIES
ACT, 2013ACT, 2013
By By
CA. P.RAJACA. P.RAJA,,
Partner Partner
P R N & Associates, ChennaiP R N & Associates, Chennai
E-mail : [email protected] : [email protected]
Origin of the concept in IndiaOrigin of the concept in India
The concept of OPC was mooted, in the report of The concept of OPC was mooted, in the report of Dr. J.J.IraniDr. J.J.Irani Committee.Committee.
Suggestion of the committee -Suggestion of the committee -With increasing use of With increasing use of information technology and computersinformation technology and computers, emergence , emergence of the service sector, it is time that the of the service sector, it is time that the entrepreneurial capabilities of the people are given entrepreneurial capabilities of the people are given an outlet for participation in economic activity. Such an outlet for participation in economic activity. Such economic activity may take place through the economic activity may take place through the creation of an economic person in the form of a creation of an economic person in the form of a companycompany. .
Contd…Contd… Yet it would not be reasonable to expect that every entrepreneur Yet it would not be reasonable to expect that every entrepreneur
who is capable of developing his ideas and participating in the who is capable of developing his ideas and participating in the
market place should do it through an association of persons. We market place should do it through an association of persons. We
feel that it is pfeel that it is possible for individuals to operate in the economic ossible for individuals to operate in the economic
domaindomain and and contribute effectivelycontribute effectively. To facilitate this, the . To facilitate this, the
Committee recommends that the law should recognize the Committee recommends that the law should recognize the
formation of a single person economic entity in the form of ‘One formation of a single person economic entity in the form of ‘One
Person Company’. Person Company’.
Such an entity may be provided with a simpler regime through Such an entity may be provided with a simpler regime through
exemptions so that the single entrepreneur is not compelled to exemptions so that the single entrepreneur is not compelled to
fritter away his time, energy and resources on procedural matters.fritter away his time, energy and resources on procedural matters.
What is one person What is one person company?company?
Section 2(62) of the CA, 2013Section 2(62) of the CA, 2013 Company formed by a single personCompany formed by a single person One-person company in the legal system One-person company in the legal system
is a move that would encourage is a move that would encourage corporatization of business and corporatization of business and entrepreneurshipentrepreneurship
OPC is a one shareholder corporate entity.OPC is a one shareholder corporate entity. Legal and financial liability is limited to Legal and financial liability is limited to
the company only.the company only.
Type Of OPC Type Of OPC
As per section 3(1) and (2) of the CA, 2013, As per section 3(1) and (2) of the CA, 2013, OPCOPC can only be can only be incorporatedincorporated as as privateprivate limited company, such as ;limited company, such as ;
i.i. A company limited by shares; orA company limited by shares; or
ii.ii. A company limited by guarantee; orA company limited by guarantee; or
iii.iii. An unlimited companyAn unlimited company
Features of OPCFeatures of OPC
It can be incorporated by one person as private limited.It can be incorporated by one person as private limited.
Name of the company should be end with (OPC). Eg., ABC Name of the company should be end with (OPC). Eg., ABC India Private Ltd(OPC).India Private Ltd(OPC).
Only One Director.Only One Director.
Minimum capital – Rs 1 lakh and Maximum Rs 50 lakhsMinimum capital – Rs 1 lakh and Maximum Rs 50 lakhs
Lock-in-PeriodLock-in-Period - Two Years from Incorporation - Two Years from Incorporation
Benefits of OPCBenefits of OPC
Limited LiabilityLimited Liability
Legal Status and Social recognition Legal Status and Social recognition
Complete control with single personComplete control with single person
Easy to get loan from banksEasy to get loan from banks
Ample time limit to file annul returns – 180 days from the Ample time limit to file annul returns – 180 days from the
closure of financial yearclosure of financial year
Minimum compliance with Companies ActMinimum compliance with Companies Act
Who can Incorporate a OPC ?Who can Incorporate a OPC ?
As per Rule 3(1) of the Companies(Incorporation) Rules, As per Rule 3(1) of the Companies(Incorporation) Rules,
2014, Only a 2014, Only a natural personnatural person who is an Indian citizen and who is an Indian citizen and
resident in India shall be eligible.resident in India shall be eligible.
As per the explanation given to Rule 3(1) - “Resident in As per the explanation given to Rule 3(1) - “Resident in
India” means a person who has stayed in India for a period of India” means a person who has stayed in India for a period of
not less than 182 daysnot less than 182 days during immediately preceding one during immediately preceding one
Calendar yearCalendar year. .
Who can not become Who can not become member/nominee of OPCmember/nominee of OPC
Minor (as per Rule 3(4) of the CR(INC), 2014. Minor (as per Rule 3(4) of the CR(INC), 2014.
Foreign CitizenForeign Citizen
Non ResidentNon Resident
A person incapacitated to contractA person incapacitated to contract
Persons other than a Natural Person (i.e.,) Living Persons other than a Natural Person (i.e.,) Living
human beinghuman being
Can OPC engage in all business ?Can OPC engage in all business ?
As per Rule 3(6) of the Companies(Incorporation) Rule, As per Rule 3(6) of the Companies(Incorporation) Rule,
2014;2014;
Such companies CAN NOT engage in Such companies CAN NOT engage in NBFCNBFC activities activities
including including investmentinvestment in securities of any body corporate.in securities of any body corporate.
OPC can not be incorporated or converted into OPC can not be incorporated or converted into Section 8Section 8
company.company.
Process for the Incorporation of Process for the Incorporation of OPCOPC
Step 1 :Step 1 :
Obtain DSC for the proposed Director Obtain DSC for the proposed Director
Step 2 :Step 2 :
Obtain DIN for the proposed DirectorObtain DIN for the proposed Director
Step 3 :Step 3 :
Select suitable company name- Maximum 6 names Select suitable company name- Maximum 6 names
Contd..Contd..Step 4 :Step 4 :
File Form INC 1 – Name AvailabilityFile Form INC 1 – Name Availability
Step 5 :Step 5 :
File Form INC 2 with in 60 days from the date of INC 1 filed – File Form INC 2 with in 60 days from the date of INC 1 filed –
Registration of the company along with the following Registration of the company along with the following
documentsdocuments
MOA & AOAMOA & AOA
ID, Address proof and photo’s of the DirectorID, Address proof and photo’s of the Director
Contd..Contd.. Written consent of the Nominee - Form INC 3.Written consent of the Nominee - Form INC 3.
Declaration by professional – Form INC 8Declaration by professional – Form INC 8
Affidavit of the subscriber and First Director – Form INC 9Affidavit of the subscriber and First Director – Form INC 9
Specimen signature – Form INC 10Specimen signature – Form INC 10
Correspondence address if its different from registered Correspondence address if its different from registered
address – Form INC 22 with in 30 days from the date of address – Form INC 22 with in 30 days from the date of
incorporation.incorporation.
Lapse status of OPCLapse status of OPC
As per Rule6(1) of the CR(INC) ,2014As per Rule6(1) of the CR(INC) ,2014
If paid up share capital is increased If paid up share capital is increased beyond FIFTYbeyond FIFTY lakhs. lakhs.
{OR}{OR}
It’s average annual turnover during the relevant period It’s average annual turnover during the relevant period exceedexceed
TWO crore TWO crore rupees.rupees.
Note : “Relevant Period" means the period of immediately Note : “Relevant Period" means the period of immediately
preceding preceding three consecutivethree consecutive financial yearsfinancial years
Withdrawal or death of nominee Withdrawal or death of nominee or member of OPCor member of OPC
As per Rule 4(3) and (4) of CA(INC), 2014 -Can withdraw his As per Rule 4(3) and (4) of CA(INC), 2014 -Can withdraw his
consent by giving notice in writing to the sole member and OPC.consent by giving notice in writing to the sole member and OPC.
Sole member should nominate another person Sole member should nominate another person within 15 days within 15 days of the of the
above and intimate to the company along with his consent in Form above and intimate to the company along with his consent in Form
No : INC 3No : INC 3
The company shall The company shall within 30 days within 30 days of receipt of withdrawal of consent of receipt of withdrawal of consent
file with the registrar Form No. INC 4 along with INC 3 of new file with the registrar Form No. INC 4 along with INC 3 of new
nomineenominee..
Conversion of OPC into PVT LtdConversion of OPC into PVT Ltd Voluntary Conversion : (i.e.,) after completion of Voluntary Conversion : (i.e.,) after completion of two years two years
from the date of incorporation - File Form No. INC 6 from the date of incorporation - File Form No. INC 6 within 30 within 30
days days ..
Mandatory Conversion : Threshold limit specified exceeded – Mandatory Conversion : Threshold limit specified exceeded –
Intimate in Form No. INC 5 to the ROC within 60 days –Rule Intimate in Form No. INC 5 to the ROC within 60 days –Rule
6(4)6(4)ANDAND
File Form No. INC 6 within File Form No. INC 6 within Six Month Six Month for conversion into for conversion into
private limitedprivate limited
Conversion of Private Ltd into OPCConversion of Private Ltd into OPC
Check share capital and Average annual turnover of the Check share capital and Average annual turnover of the
relevant period.relevant period.
Obtain “No Objection” in writing from members and Obtain “No Objection” in writing from members and
creditorscreditors
Special resolution to be passed in GM.Special resolution to be passed in GM.
File copy of special resolution in Form No. File copy of special resolution in Form No. MGT 14 within 30 MGT 14 within 30
daysdays of passing special resolution.of passing special resolution.
Conversion Of Private Ltd into Conversion Of Private Ltd into OPCOPC
As per Rule 7(1) and (2)As per Rule 7(1) and (2) The company shall file an application in The company shall file an application in Form No. INC 6Form No. INC 6 for for
its conversion.its conversion.
Directors of the company should provide Directors of the company should provide ;; Declaration by way of affidavit conforming that Declaration by way of affidavit conforming that
the members and creditors has given no the members and creditors has given no objection. objection. List of members and creditorsList of members and creditors Latest Audited balance sheet and Profit & Loss Latest Audited balance sheet and Profit & Loss
Account.Account. the copy of no objection letter of secured the copy of no objection letter of secured
creditorscreditors
Penalty Penalty
As per Rule 6(5) of the Companies (Incorporation) Rules, As per Rule 6(5) of the Companies (Incorporation) Rules,
2014: If OPC or any officer of OPC contravenes the 2014: If OPC or any officer of OPC contravenes the
provisions of the Companies(Incorporation) Rule 2014, provisions of the Companies(Incorporation) Rule 2014,
then such OPC or any officer of the OPC shall be then such OPC or any officer of the OPC shall be
punishable fine which may extend to punishable fine which may extend to Rs. 10,000/- Rs. 10,000/- and and
with further may extend to Rs. 1,000/- for every day after with further may extend to Rs. 1,000/- for every day after
first day during which such contravention continues.first day during which such contravention continues.
Chapter VII ( Management & Chapter VII ( Management & Admin) - ExemptionAdmin) - Exemption
As per the provision of section 122 of the CA,2013As per the provision of section 122 of the CA,2013
Cash Flow StatementCash Flow Statement
Section 96 – Holding AGMSection 96 – Holding AGM
Section 98 – Power of Tribunal to call meetingSection 98 – Power of Tribunal to call meeting
Section 100 – Calling EGMSection 100 – Calling EGM
Section 101 – Notice to meetingSection 101 – Notice to meeting
Section 102 – Statement to be annexed to the meeting.Section 102 – Statement to be annexed to the meeting.
Section 103 – Quorum of meetingSection 103 – Quorum of meeting
Chapter VII ( Management & Chapter VII ( Management & Admin) - ExemptionAdmin) - Exemption
Section 104 – Chairman of the meetingSection 104 – Chairman of the meeting
Section 105 – ProxiesSection 105 – Proxies
Section 106 – Restriction on voting rightsSection 106 – Restriction on voting rights
Section 107- Voting by handsSection 107- Voting by hands
Section 108 – Voting Through ElectronicallySection 108 – Voting Through Electronically
Section 109 – Demand for pollSection 109 – Demand for poll
Section 110 – Postal ballotSection 110 – Postal ballot
Section 111 – Circulation of members resolutionSection 111 – Circulation of members resolution
Company vis-à-vis ONE Company vis-à-vis ONE PERSON COMPANYPERSON COMPANY
Common Seal
Perpetual Succession
Separate legal entity
Separate property
Limited liability
Management and Control
OPC Vs SOLE OPC Vs SOLE PROPRIETORSHIPPROPRIETORSHIPOPCOPC
Separate legal entitySeparate legal entity
Limited LiabilityLimited LiabilityDebt- not the sole responsibility Debt- not the sole responsibility of the ownerof the ownerFinance- credit record of the Finance- credit record of the company company Legal requirements- will need Legal requirements- will need to register itself as such to register itself as such
Separate taxSeparate tax
Sole proprietorshipSole proprietorshipOwner & entity is same Owner & entity is same personalitypersonality
Unlimited LiabilityUnlimited LiabilityDebt - sole responsibility of the Debt - sole responsibility of the ownerownerFinance- credit history of the Finance- credit history of the owner owner Legal requirements- will not have Legal requirements- will not have to draw up paper declaring its statusto draw up paper declaring its status
Tax paid by the ownerTax paid by the owner
Practical QuestionsPractical Questions
Is OPC required to file Annul Returns ?Is OPC required to file Annul Returns ?
Is mandatory to nominate a person ?Is mandatory to nominate a person ?
Should MOA carry nominee details?Should MOA carry nominee details?
Is it mandatory to maintain minutes book?Is it mandatory to maintain minutes book?
Practical QuestionsPractical Questions
Is OPC suitable for medium & Large business?Is OPC suitable for medium & Large business?
Whether a person form more than 1 one OPC? Whether a person form more than 1 one OPC?
– Rule 3(2)– Rule 3(2)
Whether a minor become member of OPC?Whether a minor become member of OPC?
Whether an OPC can carryout NBFC activities?Whether an OPC can carryout NBFC activities?
Practical QuestionsPractical Questions What If a member of an OPC becomes a member In What If a member of an OPC becomes a member In
another OPC by virtue of being a nominee in that other another OPC by virtue of being a nominee in that other
OPC ?OPC ?
Can have more than one director in OPC ? Can have more than one director in OPC ?
Can a person form OPC who is already Director in a Can a person form OPC who is already Director in a
existing Private Ltd ?existing Private Ltd ?
Practical QuestionsPractical Questions
Whether only an individual or even a legal entity Whether only an individual or even a legal entity
can form a one-person company?can form a one-person company?
Who can be a nominee of OPC ?Who can be a nominee of OPC ?
Is OPC exempted to hold Board Meeting ?Is OPC exempted to hold Board Meeting ?
Is OPC required to obtain commencement of Is OPC required to obtain commencement of
business?business?
QUESTIONS ???QUESTIONS ???
THANK YOUTHANK YOU
By CA. P. RAJA
Partner P R N & Associates,
ChennaiE-mail :
[email protected]: 98402 03100