Rules and Regulations to Incorporate One Person Company

Rules and Regulations to Incorporate One Person Company Under Companies Act 2013

In chapter two of 2013, all the sections should be read with the company rules 2014.  All the 35 rules that are presented in companies rules 2014 has pertained to the incorporation of the company.  From rule number 3 to 7, it is about One Person Company. These five rules are reproduced below.

III One Person Company

  1. The person must be a natural Indian citizen and he must have his resident in India. He is eligible to be a nominee for the sole member of the OPC and purely eligible for incorporating One Person Company.

Note: The person must be the resident in India for One hundred and eighty-two days.

  1. Only once a person can be a member or nominee of a One Person Company. Not more than one such company.
  2. According to this rule the natural person being a member in a One Person Company, and he becomes a member in another such company by virtue of his being a nominee in that One Person Company such person shall meet the eligibility criteria specified in sub-rule 2 within a period of one hundred and eighty-two days.
  3. Candidate should not be minor to join as a member or a nominee to hold the share.

5.This kind of company cannot be converted into a company under section 8 of 2013 Act.

6.This kind of company cannot carry out with non-banking financial investments, including a body corporate.

7.Voluntarily the One Person Company cannot change into any other form of a company unless its two years old from the date of incorporation. If the threshold limit is hiked beyond 50 Lakh rupees or the average annual turnover exceeds more than two crore rupees, the company can change from OPC.

Rules and Regulations to Incorporate One Person Company

IV Nomination by the subscriber or member of One Person Company. For the purposes of the first condition to sub-section (1) of section 3

  1. The subscribers to the memorandum of the One Person Company can nominate a person. This is an advanced action. In case of the subscriber’s death, the nominated person can run the company. The prior written consent is very important. If the person agrees then he will become the member of the One Person Company.
  2. According to the sub-rule 1 of section 3 Companies Act 2013, The name of the nominee should be mentioned in the memorandum of One Person Company. It is to be done in Form No. INC. 2. The consent of the nominee is to be filled in Form No. INC. 3. As per in Companies Rules 2014, at the time of incorporation of the company, the fee, memorandum, and articles are expected to be a file with the Registrar.
  3. The nominated person by the subscriber or by the member of One Person Company shall withdraw his consent by making a notice to the sole member or One Person Company.

The sole member can nominate another person. This shall be done within fifteen days of the notice of withdrawal. The same person should nominate other people with the course of time. The nomination of a new person is in the form number INC. 3.

  1. Within thirty days of the notice of the consent, the company must file with the Registrar under the sub-rule 3. They must intimate the name of another person nominated by the sole person should be in Form number INC 4. Along with the fee provided in Companies Rules, 2014 and the written consent of such another person nominated in Form No. INC 3
  2. The subscriber or member of the company can change the name of a nominated person in case of any death or incapacity of the nominee. So he can nominate another person after getting the prior consent of such another nominee in Form No. INC. 3:

The changes are must to file with the Registrar with the notice of the changes happened in Form No. INC. 4, the fee should be paid along with it according to Companies Rule, 2014. The written consent of new nominee is expected to fill in Form No. INC 3 within 30 days of receipt of change.

  1. If the sole member of the company has passed away or unable to continue with the company the nominee can become a member of the company. The new member can opt or nominate a new person as a nominee. The new member shall nominate within the fifteen days of becoming a member. The new member can also face the situation which makes him not to continue as a member then the Company has to inform the Registrar. Along with the fee provided by Companies Rules 2014. The company must intimate about this cessation and nomination in Form No. INC 4. The changes must be intimated to the Registrar along with the written consent of the nominee within 30 days from the change of membership, in Form No. INC 3.


If One Person Company and any Officer of One Person Company did not abide by these rules then they are punishable. Ten Thousand Rupees fine and more than that Thousand rupees per day calculated from the first day of contravention continues.


VI One Person Company to Convert itself into a public company or a private company in certain cases.

  1. If the share capital of One Person Company exceeds more than 50 Lakhs or the average annual turnover of the company exceeds 2 crores then it cannot be prolonged in the name of One Person Company.
  2. One Person Company can be changed by itself under these two strategies. One is if the share capital increases beyond 50 Lakhs within the date of six months. The other is during the last day of the period if the annual turnover exceeds more than two crore rupees. Under these cases, it can be changed as Private Company with the minimum of two members and two directors. The other option is a Public Company with seven members and two directors. It is according to the section 8 of the Act.
  3. In accordance with subsection 3 of section 122, One Person Company can alter its memorandum and articles. This will give effect to the make necessary changes in incidental thereto.
  4. Within sixty days from the date of applicability, the One Person Company can give notice to Registrar in Form No. INC. 5. It can be changed as Public Limited Company or Private Limited Company because of the paid-up share capital or the increased annual turnover.
  5. If One Person Company and any Officer of One Person Company did not abide by these rules then they are punishable. Ten Thousand Rupees fine and more than that Thousand rupees per day calculated from the first day of contravention continues.
  6. By maintaining the minimum paid-up capitals a One Person Company can change into Private or Public Company by increasing the minimum number of members and directors. Like two or minimum of seven members, or two or three directors. It is possible under section 18 of the Act of conversion.


VII Conversion of private company into One Person Company

  1. The Private company which is not registered under section 8 of the Act, which has paid up share capitals of fifty Lakhs Rupees or less. If the average annual turnover is less than two crore rupees or less than that may convert into One Person Company by passing the special resolution in a general meeting.
  2. To pass the resolution, the company’s members and creditors must not have any objection.
  3. Within thirty days from the date of passing the resolution, One Person Company shall file a copy of the special resolution to the Registrar through the Form No. MGT. 14.
  4. For the conversion of One Person Company, the company can file an application from the Form No. INC. 6, along with it the following documents are required

a) The directors of the company should give the consent of conversion that none of the members are creditors of the company object for this transformation. It should also under the norms that the paid up share capital is fifty lakhs rupees or the average annual turnover is less than two crore rupees.

b) List of members and creditors are required.

c)A latest audited balance sheet of the company specifying the profit and loss

d) No objection letters by the secured editors.

  1. The Registrar shall issue the certificate if the following details are satisfied and compiled properly.

Explanation: ‘relevant period’ The period of immediately preceding three consecutive financial years.



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