LEGAL

As per section 2(62) of the Companies Act, 2013, “One Person Company” means a company which has only one person as a member

1) A company may be formed for any lawful purpose by—
(a) seven or more persons, where the company to be formed is to be a public company;
(b) two or more persons, where the company to be formed is to be a private company; or
(c) one person, where the company to be formed is to be One Person Company that is to say, a private company, by subscribing their names or his name to a memorandum and complying with the requirements of this Act in respect of registration.

Minimal paper work and compliance
Ability to form a separate legal entity with just one member
Provision for conversion to other types of legal entities by induction of more members and amendment in the Memorandum of Association.

Articles of a company may provide for the appointment of the first directors
• If articles are silent then the subscriber to the memorandum who is an individual shall be deemed to be the first director of the company
• May have a single director
• Maximum-15 directors and more than 15 directors after passing Special Resolution
• Director must have stayed in India for a total period of not less than 182 days in the previous calendar year

At least one meeting of the Board of Directors to be conducted in each half of a calendar year
• Gap between the two meetings should not be less than ninety days
• Exemption – if company has only one director.

One Person Company limited by shares or by guarantee enters into a contract with the sole member of the company, who is also the director of the company, the terms of contract or offer are in writing or contained in a memorandum or recorded in the minutes of the Board meeting held next after entering into the contact.
• Inform the Registrar about every contract entered into by the company within a period of fifteen days from the date of approval by the Board of Directors.
• Contracts in ordinary course of business not required to comply with the above.

Every company shall prepare an annual return in the prescribed form containing the particulars as they stood on the close of the financial year
The annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company

• The financial statement, signed by one director, for submission to the auditor for his report thereon.
• The report of the Board of Directors to be attached to the financial statement.
• Board of Directors Report of OPC means a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.
• Filed with ROC within 180 days from the closure of the financial year.
• Financial statement, may not include the cash flow statement.

1) Only a natural person who is an Indian citizen and resident in India, i.e., 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 calendar year shall be eligible to incorporate a One Person Company and a nominee for the sole member of a One
Person Company.
(2) A person shall not be eligible to incorporate more than one OPC or become nominee in more than one such company.
(3) A minor shall not become member or nominee of the One Person Company or can hold share with beneficial interest.
(4) Such Company cannot be incorporated or converted into a company under section 8 of the Act.
(6) Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
(7) No such company can convert voluntarily into any kind of company unless two years have expired from the date of incorporation of One Person Company, except when threshold limit (paid up share capital) is increased beyond fifty lakh rupees or its average annual turnover during the relevant period exceeds two crore rupees.