By Syed Azizul Iqbal
Various countries in the world allow setting up companies by a single person or entity. In order to expand and further facilitate the business and investment countrywide, the Government has taken the initiative to formulate legal provisions for the establishment of One Person Company [OPC]. By inserting this provision, the index of Ease of Doing Business shall be increased. The Bill is termed as “The Company Act (2nd amendment), 2020” and it is placed in the parliament.
Definition of OPC:
One Person Company [OPC] means and includes a company whose shareholder is merely a natural person [as inserted in by proposed Section 2 (Kha Kha) of sub-section 1 of section 2 of the Companies Act, 1994]
Indication of Limited Company:
At the end of the company name, “One Person Company (OPC) should be written for indication of Limited Company; however, the provision of this section will not apply in case of NGO and Company Limited by Guarantee. [as inserted by proposed Section 11(Ka) of the Companies Act, 1994]
Provisions relating to share transfer:
The transferor of the shares shall submit the list of the concerned Director, Statement of Annual Capital, and Deed of Transfer including Affidavit to the registered office of the Registrar (RJSC). Afterward, the transferor shall appear in person to the registered office of the Registrar to reconfirm the authenticity of his signature.
- If the transferor is a foreign national or resides abroad, the documents and affidavits relating to the transfer of shares shall be sent to RJSC after certification by the authorized officer of the concerned embassy.
Provision relating to transmission of shares:
- In the event of the death of a sole shareholder of OPC, the nominee/assignee shall be entitled to get all the shares of the shareholder and such an issue has to be informed to the register by the company itself.
- The nominee shall entitle to get the same dividend and other benefits as the deceased shareholder and shall be liable in the same manner.
- The nominee/assignee shall also nominate another person with his/ her written consent who will become the shareholder of the company in case of the death of such nominee.
- Memorandum and Article of Association: As per section 392A, Memorandum and Articles of Association means and includes Memorandum and Article of Association mentioned in Schedules 9A and 9B.
- Structure: As per section 392B, A natural person may form a One Person Company (OPC) for any purpose, and if he so desires, he may sign in the memorandum of in accordance with the provisions of this law on registration.
A natural person can only form a One Person Company (OPC).
The Memorandum and the Article of Association of OPC shall include the name of the nominee/ assignee.
If such assignee is died by some uncertain reason, another assignee can be inserted in lieu of such diseased.
- Share Capital: As per section 392C, the paid-up capital of an OPC shall be a minimum of Tk. 25 Lakhs and maximum Tk. 5 Crores and the annual turnover of the previous financial year is at least Tk. 1 Crore and at most Tk. 50 Crores.
If the paid up capital of OPC exceeds the amount specified above and the annual turnover exceeds the amount specified above then subject to the necessary terms and conditions, a natural person can transfer OPC to a private limited company or a public limited company.
- Procedure followed in case of One Person Company registration: As per section 392D, the rules followed for private limited company registration is same as the public limited company.
- Director: As per section 392E, the sole shareholder of OPC shall be its Director as well as manager, company secretary and other employees may be appointed to manage One Person Company (OPC).
- Meeting: As per section 392F, the Director of OPC will call at least one board of directors meeting in every half year.
- Amendment: As per section 392G, if any changes are made in the Memorandum and Article of Association of the OPC, the Company will notify about such changes to the Registrar of Joint Stock Company (RJSC).
- Transfer of shares to the natural person: As per section 392H, All shares of the OPC can be transferred to any other individuals with natural beings subject to the provision of section 38.
- Balance sheet: As per section 392I, in the case of OPC, within 160 days of the end of a financial year, its financial statements must be submitted to the Registrar.
Each balance sheet consists of the profit and loss or income and expenditure and signed by the Director.