Can a one person company issue shares?
A one person company can issue further shares, but only to its single member. It cannot invite the public to subscribe, and it cannot allot shares to a second person and remain an OPC. The member may hold any number of those shares. The company still has only one member.
Who can be allotted shares?
The sole member. Section 2(62) defines an OPC as a company with only one person as a member. That person is a natural person and an Indian citizen, and cannot be a member of more than one OPC. A minor cannot be the member or the nominee. Those limits are on the OPC page. Liability stops at the unpaid amount on the shares.
Can it offer shares to the public?
No. An OPC is a private company with one member. A public offer is a different company. Investors who need shares in their own names belong in a private limited company, which needs at least two members.
When does it stop being an OPC?
When it has more than one member. The memorandum names a nominee who becomes the member if the original member dies or becomes incapacitated. The nominee is not a second member while the original member holds office. Bringing in another shareholder on purpose is a conversion. The filing is on the OPC to private company page. An OPC cannot convert into a section 8 company.
Do capital and turnover force a conversion?
No. A rule that used to require conversion when paid-up capital crossed ₹50 lakh, or average annual turnover crossed ₹2 crore, has been removed. Paid-up capital and turnover alone do not end the OPC. The company converts when it chooses to have more members, or when it in fact has more than one. It still files the OPC annual forms, including AOC-4 and MGT-7A, on the OPC annual page. It does not hold an annual general meeting.
Frequently asked questions
Four questions cover more than one share, the old turnover limit, the nominee, and section 8.
Can the sole member hold more than one share?
Yes. The company has one member, not one share. Further shares can be allotted to that same member.
Does crossing ₹2 crore of turnover force a conversion?
No. The rule that forced an OPC to convert at ₹50 lakh of paid-up capital or ₹2 crore of average turnover was removed. Conversion is chosen, or it follows from having more than one member.
Can the nominee be allotted shares while the member is in office?
Not while the company is still an OPC. The nominee becomes the member if the original member dies or becomes incapacitated. A second living member is a different company.
Can an OPC be a section 8 company and then issue shares widely?
No. An OPC cannot be a section 8 company. A section 8 company is a separate incorporation.
Sources
An OPC is section 2(62). It has one member. Conversion into a private company is a separate filing.