One Person Company
• Simpler legal and governance regime for operation and
maintenance
• Waives a number of compliance requirements.
• ‘Lives on’ even after the death/disability of the sole
member
• OPC registered with one member
• Appointment of another person as a nominee member in
the event of the subscriber’s death or his incapacity
• Only natural person who is an Indian citizen and resident
in India is eligible to incorporate OPC.
Types of OPC
• a company limited by shares; or
• a company limited by guarantee; or
• an unlimited company.
Appointment of directors
• 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 more than 15 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
Meetings of Board
• At least one meeting of the Board of Directors
to 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.
Contract by One Person Company
• 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 of the date
of approval by the Board of Directors.
• Contracts in ordinary course of business not required to
comply with the above.
Financial Statement
• The financial statement, signed by one director, for
submission to the auditor for his report thereon.
• Board of Directors Report 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
Exemption
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Section 96. Option to dispense with the requirement of holding an AGM
Section 98. Power of Tribunal to call meetings of members
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
Restrictions
• Such Company cannot be incorporated or converted
into a company under section 8 of the Act.
• Such Company cannot carry out Non-Banking Financial
Investment activities including investment in securities
of anybody corporates.
• No such company can convert voluntarily into any kind
of company until expiry of 2 years from the date of
incorporation, except in cases where capital or
turnover threshold limits are reached.
• No minor shall become member or nominee of the
One Person Company or hold share with beneficial
interest.
Conversion of OPC
• Where the paid up share capital exceeds fifty lakh
rupees or its average annual turnover during the
relevant period exceeds two crore rupees
• OPC to convert itself, within 6 months of the date on
which its paid up share capital is increased beyond
fifty lakh rupees or the last day of the relevant period
during which its average annual turnover exceeds
two crore rupees, into either a private company with
minimum of two members and two directors or a
public company with at least of seven members and
three directors in accordance with the provisions of
section 18 of the Act
Conversion of private company into
One Person Company
• A private company other than a company
registered under section 8 of the Act may
convert itself into OPC by passing a special
resolution in the general meeting.
• AND after obtaining a NOC from all its
members and creditors.
Other features of OPC
• OPC to lose its status if paid up capital exceeds
Rs. 50 lakhs or average annual turnover is more
than Rs. 2 crores in 3 immediately preceding
consecutive years.
• Mandatory rotation of auditor after expiry of
maximum term is not applicable.
• The annual return of a One Person Company shall
be signed by the company secretary, or where
there is no company secretary, by the director of
the company.
Small Company
• The concept of “Small Company” has been
introduced for the first time by the Companies
Act, 2013.
• The Act identifies some companies as small
companies based on their capital and turnover
for the purpose of providing certain
relief/exemptions to these companies.
• Most of the exemptions provided to a small
company are same as that provided to a One
Person Company.
Small Company - Section 2 (85)
A company, other than a public company,—
1. paid-up share capital of which does not exceed Rs. 50
lakh or such higher amount as may be prescribed which
shall not be more than Rs. 5 crore; or
2. turnover of which as per its last P&L A/c does not
exceed Rs. 2crore or such higher amount as may be
prescribed which shall not be more than Rs. 20 crore
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any
special Act;
Salient Features
• Only a private company can be classified as a small
company.
• Holding company, subsidiary company, charitable company
and company governed by any Special Act cannot be
classified as a small company.
• For a small company, either the paid up capital should not
exceed Rs. 50 lakhs or the turnover as per latest statement
of profit & loss should not exceed Rs. 5 crores.
• The status of a company as “Small Company” may change
from year to year. Thus the benefits which are available
during a particular year may stand withdrawn in the next
year and become available again in the subsequent year.
Special Provisions and Exemptions
• Privileges/exemptions available to a small company
are same as OPC.
• The annual return of a Small Company can be signed
by the company secretary alone, or where there is no
company secretary, by a single director of the
company.
• A small company may hold only two board meetings
in a year, i.e. one Board Meeting in each half of the
calendar year with a minimum gap of ninety days
between the two meetings.
Special Provisions and Exemptions
• A small company need not include Cash Flow
Statement as a part of its financial statements.
• Provision regarding mandatory rotation of auditor
not applicable to a small company.
• Holding and subsidiary companies are specifically
excluded from the concept of small company.
• In other words, a holding or a subsidiary company
can never enjoy the privileges of a small company
even though they may fulfill the capital or turnover
requirement of a small company.
Foreign Company
• any company or body corporate incorporated
outside India which—
• has a place of business in India whether by
itself or through an agent, physically or
through electronic mode; and
• conducts any business activity in India in any
other manner.
Electronic Mode
Companies (Registration of Foreign Companies) Rules, 2014
• “Electronic mode” means carrying out electronically based, whether
main server is installed in India or not, including, but not limited to –
(i) B2B and B2C transactions, data interchange and other digital
supply transactions;
(ii) offering to accept deposits or inviting deposits or accepting
deposits or subscriptions in securities, in India or from citizens of
India;
(iii) financial settlements, web based marketing, advisory and
transactional services, database services and products, supply chain
management;
(iv) online services such as telemarketing, telecommuting,
telemedicine, education and information research; and
(v) all related data communication services,
whether conducted by e-mail, mobile devices, social media, cloud
computing, document management, voice or data transmission or
otherwise;
Application of Act to Foreign Company
• Where not less than fifty per cent of the paid-up
share capital, of a foreign company is held by
Indian citizen or corporate whether singly or in
the aggregate, such company shall comply with
the provisions of the Act as may be prescribed
with regard to the business carried on by it in
India as if it were a company incorporated in
India.”
Documents to be delivered to Registrar
• Within 30 days of the establishment of its place of business in India,
deliver to the Registrar for registration—
• a certified copy of the charter, statutes or memorandum and
articles, of the company in the English language OR a certified
translation thereof in the English language;
• the full address of the registered or principal office of the company;
• a list of the directors and secretary of the company containing such
particulars as may be prescribed;
• the name and address or the names and addresses of one or more
persons resident in India authorised to accept on behalf of the
company service of process
• particulars of opening and closing of a place of business in India on
earlier occasion (s);
• declaration that none of the directors of the company or the
authorized representative in India has ever been convicted or
debarred from formation of companies and management in India or
abroad
Accounts of Foreign Company
• In every calendar year make out a balance sheet
and profit and loss account
• Documents relating to copies of latest consolidated
financial statements of the parent foreign company
• Statement of related party transactions
• Statement of transfer of funds (including dividends
if any)
• A copy of a list of all places of business established
by the company in India as at the date
Annual Return
• Every foreign company shall prepare and file,
within a period of sixty days from the last day
of its financial year, to the Registrar annual
return along with such fee and containing the
particulars as they stood on the close of the
financial year.
Display of Name
Name of Company and Country of incorporation • Outside every office in English and also in the
local language
• All business letters, billheads and letter paper,
and all notices, and other official publications of
the company;
Other Compliances
• Provisions of debentures
• Provisions of annual return
• Provisions of registration of charges
• Provisions relating to books of account and their inspection
• Provisions of Inspection, Inquiry and Investigation specified
under Chapter XIV
Penalty
• Fine not less than Rs. 1 lakh but which may extend to
Rs. 3 lakh
• Continuing offence, with an additional fine which may
extend to Rs. 50,000 for every day after the first during
which the contravention continues
• Every officer of the foreign company who is in default
shall be punishable with imprisonment for a term
which may extend to 6 months or with fine which shall
not be less than Rs. 25,000 but which may extend to
Rs. 5 lakh, or with both.
Penalty
• Any failure shall not affect the validity of any
contract, dealing or transaction entered into by
the company or its liability to be sued in respect
thereof
• Company shall not be entitled to bring any suit,
claim any set-off, make any counter-claim or
institute any legal proceeding in respect of any
such contract, dealing or transaction, until the
company has complied with the provisions of this
Act applicable to it.