In India, the concept of One Person Company (OPC) was presented to support the individual entrepreneurs through the introduction of the Companies Act, 2013. As the name suggests, only one member can incorporate One Person Company in India whose liability will be limited as that of private companies.
A single person was not able to start a Company; previously as at least two Directors and Members are required to establish a private company whereas in a Public Company, three Directors and seven members are required. But now as per Section 62 of the Company’s Act 2013, a company can be formed with just one Director and one member. It is another form of a private company.
For registration of one person Company, one must have an in-depth knowledge of its features and facilities. For this, one can consult the services of Company Vakil. It offers services in company registration like registration of Pvt. Limited Company, LLP Registrations and OPC Registrations. Get a consultation for registration of one person company in India by arranging an appointment with CompanyVakil.com.
- Introduction of the concept of One Person Company has brought a revolution in the corporate sector of the country. While incorporating an OPC, one needs to get it registered to ensure the efficiency of the company. Following are the major reasons to register the One Person company in India:
- Separate Legal Entity: One Person Company enjoys the recognition as a separate legal entity and it is considered distinct and different from it sole director and owner.
- Improved Credibility: By registering, the credibility of One Person Company can be improved as a corporate entity which enables the service providers to yield more projects from the potential clients.
- Single promoter: It is easy for the sole owner and promoter to manage and get it registered by following easy steps.
- Easy and Online: The registration process is quite easy, efficient, affordable, guaranteed and moreover, one can get the OPC registered online through CompanyVakil.com without any hassle.
- Just Rs. 8,999: It costs just Rs. 8,999 for a person who is looking for OPC registration through Company Vakil.
- Lesser Compliance: OPC Registration demands lesser compliance in comparison to Private companies and other forms of companies.
- Limited Liability: OPC protects the assets of the promoter by providing limited liability protection services as similar to that of private companies.
- Following is the process that is followed to get the company registered as One Person Company:
- The first and the foremost step is to get the Digital Signature Certificate (DSC) of the proposed Director. It requires the following documents:
- Valid Email Id
- Phone Number
- Address Proof
- Aadhaar card
- PAN card
- Once the process of Digital Signature Certificate (DSC) is completed, further is the step to apply for the Director Identification Number (DIN) of the proposed Director in the Form DIR – 3 along with the name and the address proof of the director.
- While incorporating an OPC, the next step is to decide on the name of the Company. One has to file INC – 1 to get the name approval from the Ministry of Corporate Affairs(MCA). This can be done by giving six names in the order of the preference.
- All the documents need to be attached to Spice MOA, Spice Form, and Spice AOA along with the DSC of the Director and the professional, and it will be uploaded to the MCA site for their approval.
- Upon verification, the Registrar of Companies (ROC) issues a Certificate of Incorporation and one can commence their business after receiving a Certificate of Incorporation.
You can avail the services of Company Vakil for detailed guide and getting your One Person Company registered at affordable prices in a minimum time period.
- Minimum Requirements for One Person Company Registration
Following are the requirements that are needed to be complied with for starting the One Person Company.
- It is stated that only a natural person who is the resident of India will only be eligible to act as a member and nominee of a One Person Company.
- No one can be a part of two or more OPCs. A person can join only one OPC.
- Minimum one shareholder and one Director is required for its registration. The director and the promoter can be the same
- One nominee is also required.
- The Minimum Authorised Share Capital required is to be Rs. 1 Lakhs.
- Director Identification Number is required for the directors and Digital Signatures are required from a promoter and a witness.
- After the OPC is registered, the company will have to maintain proper books of accounts and also will have to participate in a Statutory audit of Financial Statements. Along with that, OPC will have to file a business income tax return every year before 30th September.
- Documents required for company registration
- For OPC registration, Memorandum of Association (MoA) is required and it is basically the object to be followed by the Company for which the business is going to be incorporated.
- Also, Articles of the Association (AoA) needs to be submitted while registration process which lays down the by-laws on which the company is going to operate.
- A nominee on behalf of one director and promoter has to be appointed in case of his death and sometimes if he fails to perform his duties, the nominee will come into the picture and perform on behalf of the director. Nominee’s consent in Form INC – 3 will be taken along with his PAN card and Aadhaar Card.
- A proof of the Registered office of the proposed Company along with the proof of the ownership and a NOC from the owner will be required to be furnished while registration of a company.
- Affidavit certificate and a consent letter of the proposed Director of Form INC -9 and DIR – 2 resp.
- Another document required will be the declaration by the professional certifying that all compliances have been made.
CompanyVakil.com have reliable services to introduce you to the all the major requirements and registration process of One Person Company.
- Advantages & Benefits of One Person Company
The chief advantage of One Person Company (OPC) is that there can only be one member to start an OPC. It is a separate legal unit proposing limited liability shied to the promoters as well it has continuity of business and easy to incorporate. Apart from enjoying a recognition and prestige as a separate legal entity, OPCs has following advantages:
- Easy Funding
OPC can generate its funds through various sources like financial institutions, angel investors, or venture capital etc. thus progressing itself towards a private limited company.
- More opportunities due to Limited liability
One of the major advantages that One Person Company enjoys is that it has more opportunities since the liability of the OPC is limited and the individual could take more risk in business without affecting or suffering the loss of personal assets. It is the encouragement to new, young and innovative start-ups.
- An OPC can avail the various benefits that are being provided to the Small Scale Industrieslike easy funding from the bank or the lower rate of Interest on loans without depositing any security in return.
- The OPC with bad credit rating may even get the loan. The credit rating of the OPC is immaterial if the rating of OPC is as per norms.
- The remuneration that is paid to the director will be allowable for deduction as per income tax laws. Benefits of presumptive taxationare also available to the OPCs which are subject to income tax act.
- The newly set-up OPC is small, micro, or medium, hence it is covered under the Enterprises Development Act, 2006 act. Thus OPC enjoys the benefits of this act as well. As per this Act, if the buyer receives his/her payment after a specified period, he is entitled to receive three times the interest on the bank rate.
- Disadvantages of One Person Company
Even if the One Person Company allows a single person to operate the company’s day to day activities, at the same time, it has several drawbacks as mentioned below. Everyone looking to incorporate One person Company must keep these limitations in mind before registration.
- Every One Person Company must suggest a nominee Director in its MoA and AoA who will be offered the ownership of the OPC in case of the incapacitated sole Director.
- Also, if OPC crosses an annual turnover of Rs. 2 crores, it has to be converted into a private company.
- One person Company can have a minimum or maximum no. of one member.
- One Person Company cannot run Non – Banking Financial Investment undertakings comprising investment in securities, etc.
- One Person Company cannot be incorporated or converted into a company under Section 8 of the Act.
- One Person Company is put on the same tax slab as other private companies for taxation purposes. As per the Income Tax Act, 1961, private companies have been placed under the tax bracket of 30% on total income.
- As compared to proprietorship firms, one person companies need to be registered with the registrar of companies under the Companies Act, 2013. This entails expenditure on the government charges and professional fees which will have to be paid to the CA or CS.
- Also in comparison to proprietorship forms, one person company does have periodic compliance costs every year. It needs to get its accounts audited and will need to file returns yearly.
- A person shall not be eligible to join more than one OPCs or become the nominee in more than one of the similar company.
- NRIs are not allowed for incorporating the One Person Company in India.
- It allows only an Indian citizen to be eligible to incorporate a One Person Company and only a resident of India can be a nominee for the only member of One Person Company.
CompanyVakil has a really transparent and efficient system to register an OPC in a minimum time span. One can easily connect with any of their associates via Company Vakil’s website.