OPC Rules

OPC haves a set of rules to oversee the activities related to eligibility, conversion, nominee, name reservation, application for incorporation of the company.

 

One Person Company follows certain rules from incorporation to conversion to the dissolution of the company. Here we discuss some important rules for the functioning of the one person company:

Rule 3- One Person Company

  • Rule 3(1): Eligibility to incorporate One Person Company or to be a nominee of the company:
  1. A natural person
  2. An Indian citizen
  3. Resident of India

Note-A natural person, who stayed in India for a minimum period of 182 days during immediate preceding one calendar year, shall be called a resident of India.

  • Rule 3(2): An eligible person cannot be a member or nominee of more than such kind of company.
  • Rule 3(3): If a natural person is already a member of One Person Company and by virtue of law as a nominee becomes a member in another such kind of company then in that case within 180 days person should meet the criteria of Rule 3(2) i.e. resign from any one of the company.
  • Rule 3(4): A minor cannot become a member or nominee in One Person Company.
  • Rule 3(5): One Person Company cannot convert into section 8 company.
  • Rule 3(6): Prohibited to carry non-banking financial investment which includes investment in securities of any body corporate.
  • Rules 3(7): One Person company cannot convert voluntarily into any other business entity until two years get expired after incorporation of the company. But in case of crossing the threshold limit company can convert into other business entity compulsorily even before completion of the two years from the date of incorporation.

 

Note- Paid up share capital 50 lakhs or average annual turnover 2 crore is a threshold limit for OPC.

 

Related: Step Wise One Person Company Registration Procedure in India

 

Rule 4- Nomination by the subscriber or member of OPC

  • Rule 4(1): The subscriber in MOA of One Person Company appoints a person as a nominee of the company.
  • Rules 4(2): Mention the name of nominee in MOA of company and file the consent of the nominee in prescribed form with ROC.
  • Rule 4(3): Nominee can withdraw his consent by giving notice to the company and the sole owner of the company should appoint another nominee within 15 days from the date of receiving the notice.
  • Rule 4(4): File notice of withdrawal of consent and name of another nominee in prescribed form INC-4 with ROC within 30 days from the date of receiving the notice.
  • Rule 4(5): Change the name of nominee by subscriber or member of the company for any reason.
  • Rule 4(6): In the event of death or incapacity to contract, the nominee of the company becomes the member of the company and such new member will appoint a new nominee within 15 days.

 

Rule 6- Conversion of OPC into a public company or private company

  • Rule 6(1): When OPC exceeds the threshold limit, it will cease the title of One Person Company.
  • Rule 6(2): Compulsory conversion of OPC into either a private company or a public company accordance with the provisions of section 18 of the act, within 6 months from the day of exceeding the threshold limit.
  • Rule 6(3): To give effect to the conversion, alter the MOA and AOA of the company and other necessary changes.
  • Rule 6(4): File form INC-5 with ROC within 60 days from the day of exceeding the threshold limit intimating about compulsory conversion of the company by virtue of law.
  • Rule 6(5): Contravening any of the rules may attract a penalty of maximum Rs.10000 and with further fine maximum Rs.1000 per day till the contravene continues.
  • Rule 6(6): Fulfil the due compliances of section 18 for conversion i.e. increases the minimum number of members, increase the minimum number of directors, minimum paid up capital etc.

 

Related: OPC vs Public Company

 

Rule 9- Reservation of name

  • For reserving the proposed name of OPC, made an application in form INC-1 along with the prescribed fee to ROC (Registrar of Companies).

 

Rule 12- Application for incorporation of company

  • Incorporation documents submitted must be filed in form SPICe INC-32 with the ROC (Registrar of Companies) along with the prescribed fee.

 


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