One Person Company is a company that has only one person as its member according to subsection 62 of Section 2 of the Companies Act, 2013. It is similar to a private limited company and the name of a one person company always ends with the terms “(Business Name (OPC) Private Limited).
So, an OPC is effectively a company that has only one shareholder as its member.
FEATURES OF A ONE PERSON COMPANY
The following are the main features of a one person company –
- SINGLE MEMBER : OPCs can have only one member or shareholder, unlike other private companies.
- NOMINEE : The memorandum of OPC must indicate the name of a person (other than the subscriber), with his prior written consent in the prescribed form, who will become a member of the OPC when the subscriber dies or is incapacitated to contract.
- MINIMUM ONE DIRECTOR : A OPC must have minimum one director and there is no limit on the maximum number of directors.
- NO MINIMUM PAID UP SHARE CAPITAL : There is no minimum paid up share capital prescribed for one person companies.
- LEGALLY REGISTERED NAME : A OPC must have a legally registered name, under which it operates and the term; One Person Company must be mentioned wherever the name of the company is used.
WHAT HAPPENS AFTER THE DEATH OF SOLE MEMBER?
An OPC has the status of a company in the eyes of law, and one of the most distinguishable characteristics of a company is “perpetual succession” which is reflected by the maxim ‘members may come and members may go, but the company goes on forever’
However, Since there is only one member in an OPC, his death will result in the nominee choosing or rejecting to become its sole member.
- Where sole member ceases to be member because of Death or his incapacity to enter into contract or for any other reason, his nominee become member of OPC and such new member shall, within 15 Days of becoming member, nominate a new nominee with his prior consent in Form INC 3, who shall in the event of his death or incapacity to enter into contract become member of such company.
- Company shall within 30 Days of change in membership, file with the Registrar, notice of such cessation and nomination in Form INC 4, along with consent of new nominee in Form INC 3.
Hence, there is no need for any lengthy procedure or submission of will as is the case with sole proprietorships.