A One Person Company (OPC) is the latest form of business launched in the year 2013. OPC is for single owner/founder who do not find any organized and safe form of business, OPC can be formed by a single member with least compliances and maintenance.
Existing directors: Yes, they can open the OPC but if they already own one, then any further OPC is not allowed.
Employees: Employees are generally not allowed by their employers to form a company and be a director. They may hold shares but cannot take position as director. If you want to open a company, then check your employment agreement and you may also seek permission from the respective employer.
Funding & Conversion of OPC into Private Limited Company
OPC cannot raise funding by selling the share of equity shares because there cannot be two members. The OPC can be sold completely without dividing any part of equity shares. Further, OPC can also be converted into Private limited Company in consonance with the following rules:
Voluntary Conversion of OPC into Private Company: The voluntary conversion of OPC into private limited company can happen only after two years from the date of incorporation.
Mandatory Conversion of OPC into Private Company: If the Company has a paid up capital of Rs.50 lakh or more or relevant turnover during the financial year exceed Rs.2 crore, then OPC need to convert into Private limited company.
Prepare Documents: Once you sign the term sheet, next and final step is to prepare documents like Shareholder agreement etc.
How to choose Company name for OPC One Person Company Registration?
# ABC - Prefix: The prefix should reflect your brand name and should be unique. I.e. no it should not match with any existing company or trademark. The example of prefix i.e. your first word is TATA, Reliance, Hubco etc.
# Technologies - Suffix: It is regarded as the second word of your company name. This should reflect your main proposed business. E.g., if you are into technology company, then write technology, for steel business, you can use TATA Steel Ltd.