As per the Companies Act, 2013 a one person company (OPC) is a private entity formed by only one person. It constitutes of a single person only. OPC incorporation can be done by complying with the registration requirements as mentioned in the Act. A Memorandum of Association should be prepared which shall also contain the name of the person who will overtake the business if the subscriber dies or is unable to enter into an agreement.
OPC incorporation can take place via two ways. The first way is incorporation through SPICe without filing RUN and the other way is incorporation through SPICe with RUN.
1. Without RUN- Reserving Unique Names (RUN) is a unique web service introduced by the Ministry of Corporate Affairs to ease the process of reserving names of companies. With the help of RUN, the members of the company can reserve the companies name or alter its name. If an OPC is not registered on RUN, it can be incorporated through the normal procedure of incorporation of any company in India under the Companies Act, 2013.
Without RUN, OPC incorporation can be done by following the below given steps and filing the SPICe form.
● Allotment of a Director Identification Number (DIN).
● Reservation of Company’s name
● Drafting the Memorandum of Association and Articles of Association.
● Certificate of OPC incorporation.
● Allotment of PAN number.
2. With RUN- If an OPC has already filed for RUN, its members are not required to register the name of the OPC separately. After the name of the OPC is approved, the subscriber of the company can file the SPICe form within 20 days from the date of RUN.
After the form is filed, the Registrar of Companies examines all the documents of the company, its Memorandum and Articles. If the incorporation is not in violation of the Companies Act, the Registrar may approve the incorporation of OPC and issue a Certificate of Incorporation.
The Rule 3 of Companies (Incorporation) Rules, 2014 states the following rules for OPC incorporation:
● OPC shall be formed by a natural person. He should be a citizen of India and should be residing in India.
● A nominee for the OPC should be mentioned in the Memorandum of the Company.
● No two OPC shall have the same subscriber or nominee.
● A minor cannot become a member of an OPC or a nominee. Also, he cannot hold share with beneficial interest.
● An OPC cannot indulge in Non-Banking Investment Activities including investment in securities of any body corporates.
● An OPC cannot voluntarily convert itself into any other company before the expiration of two years of its incorporation except in certain circumstances.
The process for incorporation of companies in India under the Companies Act is similar for all kinds of companies. However, it is subjected to certain restrictions.