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The Tax Publishers Companies Act, 2013--OPC One Person Company : Overview Prayag Narain With the arrival of Companies Act, 2013, a new concept of One Person Company was introduced. Though a single member can run such type of business, it is entirely different from sole proprietorship as it comes under the company form of business. In this write-up, the learned author provides an insight into various aspects of formation and exemptions available to one person companies. 1. Introduction Under Companies Act, 1956, companies were classified as two fold viz., public company and private company, however, Companies Act, 2013 also includes One Person Company (OPC) making the classification of companies three-fold. As the name only suggests, OPC means a company which has only one person as a member. Thus, with the incorporation of the concept of OPC, a single person is allowed to run a company. Section 2(62) of the Companies Act, 2013 defines the term One Person Company to mean a company which has only one person as a member. 2. Nature and status of OPC According to section 3(1)(c), a company may be formed for any lawful purpose by one person, where the company to be formed is to be One Person Company, i.e., to say, a private company, by subscribing his name to a memorandum and complying with the requirements of the Companies Act, 2013 in respect of registration. It means that a one person company formed has to be considered as a private company. Therefore, all the provisions applicable to a private company will be applicable to OPC except the provisions otherwise expressly provided or excluded in the Act and rules regarding one person company viz., its articles restricts the right to transfer its shares and prohibits any invitation to public to subscribe for any securities of the company, however, limit of members upto two hundred is not applicable to OPC. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Companies Act, 2013--OPC

One Person Company : Overview

Prayag Narain

With the arrival of Companies Act, 2013, a new concept of One Person Company was introduced. Though a single member can run such type of business, it is entirely different from sole proprietorship as it comes under the company form of business. In this write-up, the learned author provides an insight into various aspects of formation and exemptions available to one person companies.

1. Introduction

Under Companies Act, 1956, companies were classified as two fold viz., public company and private company, however, Companies Act, 2013 also includes One Person Company (OPC) making the classification of companies three-fold. As the name only suggests, OPC means a company which has only one person as a member. Thus, with the incorporation of the concept of OPC, a single person is allowed to run a company. Section 2(62) of the Companies Act, 2013 defines the term One Person Company to mean a company which has only one person as a member.

2. Nature and status of OPC

According to section 3(1)(c), a company may be formed for any lawful purpose by one person, where the company to be formed is to be One Person Company, i.e., to say, a private company, by subscribing his name to a memorandum and complying with the requirements of the Companies Act, 2013 in respect of registration. It means that a one person company formed has to be considered as a private company. Therefore, all the provisions applicable to a private company will be applicable to OPC except the provisions otherwise expressly provided or excluded in the Act and rules regarding one person company viz., its articles restricts the right to transfer its shares and prohibits any invitation to public to subscribe for any securities of the company, however, limit of members upto two hundred is not applicable to OPC.