What is the AGM for One Person Company under the Companies Act, 2013?
Introduction
The Companies Act, 2013, governs the functioning of business in India. One Person Company (OPC) is a type of company that can be formed with only one member. OPCs have certain provisions that are different from other types of companies. In this article, we will discuss the Annual General Meeting (AGM) provisions for a One Person Company under the Companies Act, 2013.
What is One Person Company?
An OPC is a type of company that can be incorporated with just one shareholder, unlike other company types that require a minimum of two shareholders. The sole shareholder of an OPC has limited liability, and the business itself is treated as a separate legal entity.
What are the advantages of OPC?
The following are the key advantages of OPC:
- Lesser Compliance Burden
- Liability Limited to the value of shareholding
- Distinct identity from its owner
- Personal assets of the Owner not affected
- Easy decision-making
- No Statutory Requirement of Holding AGM
- Compulsory Nomination
What is the process to register an OPC?
In India, the registration process for an OPC involves two parts, as outlined below, utilizing the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form. This consolidated form replaces the previous forms required for company incorporation, including the earlier SPICe form.
1. Part A: The initial part of the SPICe+ form serves two purposes:
- Firstly, it is used to seek approval for the desired company name.
- Secondly, it facilitates the application for the Director Identification Number (DIN) or Permanent Account Number (PAN) of the proposed director.
2. Part B: The second part of the form, referred to as Part B, encompasses various details related to the incorporation process. In this section, the following information is provided:
- Registered office address of the OPC
- MOA/AOA (Shareholders, Director particulars)
- KYC Documents of the Director
- Any other documents required
What are the Annual General Meeting (AGM) Requirements for OPCs
An Annual General Meeting is a mandatory requirement for companies to discuss key matters with shareholders and to present the company’s financial statements. However, OPCs have certain exemptions and relaxations under the Act, with regard to holding an AGM.
What are the AGM Provisions for OPCs?
Section 96 of the Companies Act, 2013, provides that every company, other than an OPC, is required to hold an Annual General Meeting (AGM) every year.
What are the exemptions for an OPC in India?
The following are the exemptions for an OPC in India:
- An OPC has no obligation to prepare a cash flow statement as a part of the financial statement.
- The annual return can be certified by the director of the company if an OPC does not have a CS.
- An OPC is not obligated to hold an annual general meeting.
Conclusion
The Companies Act, 2013, recognizes the unique nature of OPCs and provides certain exemptions and relaxations, including the exemption from holding Annual General Meetings (AGMs). OPCs are required to hold Board Meetings instead of AGMs to discuss and approve key matters, such as financial statements, appointment of auditors, declaration of dividends, and overall performance review.
