The number of shareholders a company can have depends on the structure of the company. This article briefly explains all about OPCs including the number of shareholders and directors an OPC can appoint.
What Is an OPC?
An OPC is like a sole proprietorship firm but has some special features. In an OPC, 100% of the stakes are owned by that one person. Both One Person Company and sole proprietorship are owned by an individual. But unlike a sole proprietorship, an OPC is treated as a separate entity. That means the owner of an OPC can enjoy limited liability, and his personal property is always safe no matter the debt of the business. Now, let’s see how many shareholders can a one person company have.
Number of People Allowed to Become One Person Company Shareholders and Directors
Members of a company are recognised as the shareholders of a company. As the name suggests, one person company can have only one person as a member. This means that the minimum and the maximum number of shareholders an OPC can have is just one.
What Are the Features of a One-Person Company?
Some important features of One Person Company are as follows:
- Single-member: Unlike other private companies, an OPC can have only one shareholder or member.
- Private company: As per the Companies Act of 2013, a single person can form a company for any lawful purpose where all its shares are owned by the owner. Hence, OPCs are a kind of private company.
- Nominee Member: OPCs have a unique feature that distinguishes them from other company structures. The sole member of the company has to declare a nominee while registering a company
- No Perpetual Succession: As there is only one member in an OPC, the nominee he declared during the registration process can choose or reject to take his place, in case of death or incapability of the sole owner. This feature is unlike any other kind of company that follows perpetual succession.
- Number of Directors: The minimum number of directors an OPC can have is 1 and the maximum is 15, which can be increased with a special resolution.
- Minimum paid-up share capital: For OPCs, the Companies Act of 2013 does not prescribe any amount as the minimum paid-up capital.
- Privileges: There are many special privileges and exemptions provided to OPCs by the Companies Act, 2013. Such special privileges are not provided to other kinds of companies.
Who Can Establish a One-Person Company?
A One Person Company can be registered by a person who can qualify the following criteria:
- The applicant must be an actual person. That is, no company can become a member of an OPC. Only a natural person can.
- He or She should be a citizen of India, whether a resident of India or not. A person who has stayed in India for not less than 120 days during the immediately preceding calendar year, can be termed a resident.
- The person should not be a member of any other OPC. That means, one person can hold membership to only one OPC at a time. This also applies to the nominee. If the nominee happens to become a member of more than OPCs by virtue, he or she has to give up either one of its memberships within a period of 180 days.
What Is the Procedure to Register an OPC?
- First, the shareholder has to obtain a Digital Signature Certificate (DSC). The nominee must also possess a DSC. To apply for DSC, you will require passport-size photos of the applicant, address proof, and identity proof.
- Director Identification Number(DIN) has to be acquired for the promoter and the nominee.
- Reservation of the company name shall be the third step. You can apply to the MCA for a reservation of the name. You can submit up to six name options. MCA processes them in 24-72 hours. The name to be reserved shall conform to the naming standards, and must end with or include the word “OPC”.
- After approval of the name, an application for incorporation can be filed with the MCA. The application must be affixed with signed copies of the Memorandum of Association (MOA) and Articles of Association (AOA), identity proof, address proof, affidavits, and declaration of the sole promoter. Also, the consent of the nominee direction has to be attached to the Form INC-3
- The Registrar of Companies (ROC) shall then review your application. In case of any discrepancies, the application might get rejected. However, you can rectify and re-submit the application.
One Person Companies can have only one shareholder, who shall also be the promoter or the owner. If you are to incorporate an OPC, you can seek the services of the business experts at Vakilsearch to apply for you.
Vakilsearch guides you throughout the process, from getting name approval, drafting of MoA, drafting of AoA, arranging and assembling all the documents, filing the application of incorporation, to keeping you up to date with the status of your application. The professionals at Vakilsearch can help you incorporate your OPC speedily, and with ease.