1. Introduction

Members of a company are nothing but subscribers to its memorandum of association, or its shareholders. So, an OPC is effectively a company that has only one shareholder as its member.

Such companies are generally created when there is only one founder/promoter for the business. Entrepreneurs whose businesses lie in early stages prefer to create OPCS instead of sole proprietorship business because of the several advantages that OPCs offer.

2. Features of a One Person Company

Here are some general features of a one-person company:

1. Private company: Section 3(1) (c) of the Companies Act says that a single person can form a company for any lawful purpose. It further describes OPCs as private companies.
2. Single member: OPCs can have only one member or shareholder, unlike other private companies.
3. Nominee: A unique feature of OPCs that separates it from other kinds of companies is that the sole member of the company has to mention a nominee while registering the company.
4. No perpetual succession: Since there is only one member in an OPC, his death will result in the nominee choosing or rejecting to become its sole member. Is does not happen in other companies as they follow the concept of perpetual succession.
5. Minimum one director: OPCs need to have minimum one person (the member) as director. I can have a maximum o15 directors.
6. No minimum PSC: Companies Act, 2013 has not prescribed any amount as minimum paid-up capital for OPCs.

3. Formation of One Person Companies

A single person can form an OPC by subscribing his name to the memorandum of association and falling requirements prescribed by the Companies Act, 2013. Such memorandum must state details of a nominee who shall become the company’s sole member in case the original member dies or becomes incapable of entering into contractual relations.is memorandum and the nominee’s consent to his nomination should be .led to the Registrar of Companies along with an application of registration. Such nominee can withdraw his name at any point of time by submission of requisite applications to the Registrar. His nomination can also later be cancelled by the member.

4. Membership in One Person Companies 

Only natural persons who are Indian citizens and residents are eligible to form a OPC in India same condition applies to nominees of OPCs. Further, the law prohibits minors from being members or nominees of OPCs.

5. Conversion of OPCs into other Companies

Rules regulating the formation of one person companies expressly restrict conversion of OPCs into Section 8   companies, i.e. companies that have charitable objectives. OPCs also cannot voluntarily convert into other kinds of companies until the expiry of two years from the date of their incorporation.

6. Privileges of One Person Companies

•    Their financial statements need not include cash flow statements.
•    A company secretary is not required to sign annual returns directors can also do so.
•    Provisions relating to independent directors do not apply to them.
•    It does not have to hold annual general meetings.