Now a days the agenda of ONE PERSON COMPANY is common, still some of us are unaware of the whole rules and regulation of OPC, here present comprehensive Companies Law provisions relates to One Person Company (OPC).
Section 2 (62): Definition of "One Person Company":
“One Person Company” means a company which has only one person as a member
Section 2 (40): Definition of "Financial Statement"
“financial statement” in relation to a company, includes:
- a balance sheet as at the end of the financial year;
- a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year;
- cash flow statement for the financial year
- a statement of changes in equity, if applicable; and
- any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause
Provided that the financial statement, with respect to One Person Company (OPC), small company and dormant company, may not include the cash flow statement;
Section 2 (68): Definition of "Private Company"
“private company” means a company having a minimum paid-up share capital of one lakh rupees (Rs. 1,00,000/-) or such higher paid-up share capital as may be prescribed, and which by its articles,
- restricts the right to transfer its shares;
- except in case of One Person Company (OPC), limits the number of its members to two hundred:
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:
Provided further that—
- persons who are in the employment of the company;
- and persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased,
shall not be included in the number of members; and
prohibits any invitation to the public to subscribe for any securities of the company;
Section 3: Formation of the One Person Company (OPC)
(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 (OPC) 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:
Provided that the memorandum of One Person Company (OPC) shall indicate the name of the other person, with his prior written consent in the prescribed form, who shall, in the event of the subscriber’s death or his incapacity to contract become the member of the company and the written consent of such person shall also be filed with the Registrar at the time of incorporation of the One Person Company (OPC) along with its memorandum and articles:
Provided further that such other person may withdraw his consent in such manner as may be prescribed:
Provided also that the member of One Person Company (OPC) may at any time change the name of such other person by giving notice in such manner as may be prescribed:
Provided also that it shall be the duty of the member of One Person Company (OPC) to intimate the company the change, if any, in the name of the other person nominated by him by indicating in the memorandum or otherwise within such time and in such manner as may be prescribed, and the company shall intimate the Registrar any such change within such time and in such manner as may be prescribed:
Provided also that any such change in the name of the person shall not be deemed to be an alteration of the memorandum.
(2) A company formed under sub-section (1) (ie., One Person Company / Private Limited Company / Public Limited Company) may be either:
(a) a company limited by shares; or
(b) a company limited by guarantee; or
(c) an unlimited company.
Section 4(1)(f) : Memorandum
The memorandum of a One Person Company (OPC) shall state - the name of the person who, in the event of death of the subscriber, shall become the member of the company.
Section 12 (3) Proviso : Registered Office of the One Person Company (OPC)
Provided further that the words ‘‘One Person Company’’ shall be mentioned in brackets below the name of such company, wherever its name is printed, affixed or engraved.
Section 92 (1) Proviso : Annual Return
Provided that in relation to One Person Company (OPC) and small company, the annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company.
Section 96 (1) : Annual General Meeting (AGM)
Every company other than a One Person Company (OPC) shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it, and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next .
Section 122 : Applicability of Chapter-VII (Management & Administration) to One Person Company (OPC)
The provisions of the below sections shall not apply to a One Person Company (OPC) –
- Section 98 : Power of Tribunal to call meetings of members, etc.
- Section 100 : Calling of extraordinary general meeting
- Section 101 : Notice of meeting
- Section 102 : Statement to be annexed to notice
- Section 103 : Quorum for meetings
- Section 104 : Chairman of meetings
- Section 105 : Proxies
- Section 106 : Restriction on voting rights
- Section 107 : Voting by show of hands
- Section 108 : Voting through electronic means
- Section 109 : Demand for poll
- Section 110 : Postal ballot
- Section 111 : Circulation of members' resolution
1. The ordinary businesses as mentioned under clause (a) of sub-section (2) of section 102 which a company, other than a One Person Company, is required to transact at its annual general meeting, shall be transacted, in case of One Person Company, as provided in sub-section (3).
2. For the purposes of section 114 (Ordinary and Special Resolutions), any business which is required to be transacted at an annual general meeting or other general meeting of a company by means of an ordinary or special resolution, it shall be sufficient if, in case of One Person Company, the resolution is communicated by the member to the company and entered in the minutes-book required to be maintained under section 118 Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot) and signed and dated by the member and such date shall be deemed to be the date of the meeting for all the purposes under this Act.
3. Notwithstanding anything in this Act, where there is only one director on the Board of Director of a One Person Company, any business which is required to be transacted at the meeting of the Board of Directors of a company, it shall be sufficient if, in case of such One Person Company, the resolution by such director is entered in the minutes-book required to be maintained under section 118 (Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot) and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors for all the purposes under this Act.
Section 134 : Financial statement, Board’s report, etc.
Section 134 (1) : The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board at least by the chairperson of the company where he is authorised by the Board or by two directors out of which one shall be managing director and the Chief Executive Officer, if he is a director in the company, the Chief Financial Officer and the company secretary of the company, wherever they are appointed, or in the case of a One Person Company, only by one director, for submission to the auditor for his report thereon.
Section 134 (4) : The report of the Board of Directors to be attached to the financial statement under this section shall, in case of a One Person Company, mean 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.
Section 137 (1) : Copy of financial statement to be filed with Registrar 3rd Proviso : Provided also that a One Person Company shall file a copy of the financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within one hundred eighty days from the closure of the financial year
Section 149 : Company to have Board of Directors
(1) Every company shall have a Board of Directors consisting of individuals as directors and shall have :
(a) a minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and
(b) a maximum of fifteen directors:
Provided that a company may appoint more than fifteen directors after passing a special resolution:
Provided further that such class or classes of companies as may be prescribed, shall have at least one woman director.
Section 152 : Appointment of Directors
Where no provision is made in the articles of a company for the appointment of the first director, the subscribers to the memorandum who are individuals shall be deemed to be the first directors of the company until the directors are duly appointed and in case of a One Person Company an individual being member shall be deemed to be its first director until the director or directors are duly appointed by the member in accordance with the provisions of this section.
Section 173 : Meetings of Board
A One Person Company, small company and dormant company shall be deemed to have complied with the provisions of this section if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days: Provided that nothing contained in this sub-section and in section 174 (Quorum for meetings of Board) shall apply to One Person Company in which there is only one director on its Board of Directors.
Provided that nothing contained in this sub-section and in section 174 (Quorum for meetings of Board) shall apply to One Person Company in which there is only one director on its Board of Directors.
Section 193 : Contract by One Person Company (OPC)
Where 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 company shall, unless the contract is in writing, ensure that the terms of the contract or offer are contained in a memorandum or are recorded in the minutes of the first meeting of the Board of Directors of the company held next after entering into contract:
Provided that nothing in this sub-section shall apply to contracts entered into by the company in the ordinary course of its business.
(2) The company shall inform the Registrar about every contract entered into by the company and recorded in the minutes of the meeting of its Board of Directors under sub-section (1) within a period of fifteen days of the date of approval by the Board of Directors.
DISCLAIMER- This write-up is based on the understanding and interpretation of author and the same is not intended to be a professional advice.
Tags :corporate law