Introduction

A One Person Company (OPC) is a unique form of business introduced under the Companies Act, 2013, that allows a single individual to enjoy the advantages of a corporate structure. While it simplifies ownership and operations, an OPC is still a legally incorporated entity and must follow a structured constitutional framework. This constitution defines how the company is formed, governed, and managed. The OPC’s constitution comprises key legal documents and roles that ensure it operates within the boundaries of law and best practices. This article defines the basic structure of an OPC constitution through its essential components.

Memorandum of Association (MOA)

The Memorandum of Association is the foundational document of an OPC. It sets out the name of the company, state of incorporation, main business objectives, liability clause, capital structure, and subscriber details. The MOA serves as the company’s charter and defines the scope within which the OPC can operate. It must be filed at the time of incorporation and cannot be altered without legal approval.

Articles of Association (AOA)

The Articles of Association provide the internal rules and governance mechanisms of the OPC. It lays down the procedures for appointment of directors, decision-making, management structure, and company meetings. The AOA complements the MOA by detailing how the company functions day-to-day and how it interacts with stakeholders.

Sole Member and Shareholder

An OPC must have only one member or shareholder, who owns 100% of the company’s shares. This individual is the legal owner of the OPC and enjoys full control over profits and strategic decisions. The shareholder’s name is recorded in the MOA, and any change in membership must be reported to the Registrar of Companies (RoC).

Nominee Requirement

Every OPC must appoint a nominee at the time of incorporation. The nominee is a person who will take over the ownership of the company in the event of the sole member’s death or incapacity. This ensures business continuity and is a mandatory part of the company’s constitution. The nominee’s consent is submitted in Form INC-3 and documented in the MOA.

Director and Management Role

An OPC must have at least one director, who is often the same individual as the shareholder. However, the Companies Act permits the appointment of up to 15 directors. The director is responsible for managing the business, ensuring compliance, and signing legal documents on behalf of the company. Board resolutions and records of decisions must be maintained even if there is only one director.

Registered Office Clause

The constitution of an OPC must specify a registered office address. This is the official location for receiving legal notices and correspondence. Any change in the registered office must be reported to the RoC through appropriate filings. The registered office represents the legal domicile of the OPC.

Capital Structure Clause

The capital clause in the constitution outlines the authorized and paid-up share capital of the OPC. There is no minimum capital requirement, giving the member flexibility. However, if the paid-up capital exceeds ₹50 lakh, the OPC must convert into a private limited company. The capital clause also defines how shares are divided and recorded.

Compliance and Reporting Structure

Even with a simple structure, an OPC must maintain a compliance system as part of its constitution. This includes maintaining statutory registers, conducting audits, filing annual returns (AOC-4 and MGT-7A), and paying taxes. The constitution ensures the company operates lawfully and remains in good standing with regulatory bodies.

Conclusion

The basic structure of an OPC constitution brings together key legal elements that define its identity, governance, and functioning. From the Memorandum and Articles of Association to the roles of the sole member, nominee, and director, each component contributes to the company’s lawful existence. This structure ensures clarity, continuity, and compliance while giving individual entrepreneurs a formal platform to operate and grow their businesses. For those looking to build a legally robust yet independently managed venture, the OPC constitution offers both flexibility and stability.

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