One Person Company Registration
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About One Person Company Registration
What is OPC registration?
One Person Company in India is a new concept that has been introduced with the Company’s Act 2013. One Person Company in India is incorporated by a single person. Before the enforcement of the Companies Act 2013 a single person was not able to establish a company. An OPC has features of a Company and the benefits of the sole proprietorship. Earlier if a person had to establish a business then he or she should only opt for a sole proprietorship.
According to Section 2 (62) of the Company’s Act 2013, a company can be formed with just 1 director and 1 member. One Person Company registration in India is a type of entity where there are lesser compliances requirements than that of a Private Limited Company.
A One Person Company Registration in India can be obtained under the Companies Act 2013 with just one single member and one Director. The Director and member can also be the same person. Here an individual who may be a resident or Non-resident Indian can register an OPC in India.
Advantages Of OPC
Legal status
The OPC receives a separate legal entity status from the member. The separate legal entity of the OPC gives protection to the single individual who has incorporated it. The liability of the member is limited to his/her shares, and he/she is not personally liable for the loss of the company. Thus, the creditors can sue the OPC and not the member or director.
Easy to obtain funds
Since OPC is a private company, it is easy to go for fundraising through venture capitals, angel investors, incubators etc. The Banks and the Financial Institutions prefer to grant loans to a company rather than a proprietorship firm. Thus, it becomes easy to obtain funds.
Less compliances
The Companies Act, 2013 provides certain exemptions to the OPC with relation to compliances. The OPC need not prepare the cash flow statement. The company secretary need not sign the books of accounts and annual returns and be signed only by the director.
Easy incorporation
It is easy to incorporate OPC as only one member and one nominee is required for its incorporation. The member can be the director also. The minimum authorized capital for incorporating OPC is Rs.1 lakh but there is no minimum paid-up capital requirement. Thus, it is easy to incorporate as compared to the other forms of company.
Easy to manage
Since a single person can establish and run the OPC, it becomes easy to manage its affairs. It is easy to make decisions, and the decision-making process is quick. The ordinary and special resolutions can be passed by the member easily by entering them into the minute book and signed by the sole member. Thus, running and managing the company is easy as there won’t be any conflict or delay within the company.
Perpetual succession
The OPC has the feature of perpetual succession even when there is only one member. While incorporating the OPC, the single-member needs to appoint a nominee. Upon the member’s death, the nominee will run the company in the member’s place.
Disadvantages Of OPC
Suitable for only small business
OPC is suitable for small business structure. The maximum number of members the OPC can have is one at all times. More members or shareholders cannot be added to OPC to raise further capital. Thus, with the expansion and growth of the business, more members cannot be added.
Restriction of business activities
The OPC cannot carry out Non-Banking Financial Investment activities, including the investments in securities of anybody corporates. It cannot be converted to a company with charitable objects mentioned under Section 8 of the Companies Act, 2013.
Ownership and management
Since the sole member can also be the director of the company, there will not be a clear distinction between ownership and management. The sole member can take and approve all decisions. The line between ownership and control is blurred, which might result in unethical business practices.
Documents Required For OPC Registration
- PAN Card
- Passport
- Voters Identity Card
- Ration Card
- Driving License
- Electricity Bill
- Telephone Bill
- Aadhaar Card
- Bank Statement
- Sale Deed Copy
- Lease / Rent Agreement
- MOA Subscriber Sheet
- AOA Subscriber Sheet
- Passport Size Photo
- Recent Utility Bill
- Business Place
Customer Reviews For OPC
One Person Company FAQ's
A nominee is an individual who becomes a member of the company in case of the promoter’s death or incapacitation.
Authorized Capital of a Company is the number of shares a company can issue to the shareholders. A Company is required to pay the Government an authorized capital fee to issue shares.
For an OPC statutory audit is mandatory. A company needs to appoint a CA as the auditor of the Company. The auditor needs to verify the books of accounts and issue a Statutory Audit report.
An OPC can raise funds through venture capital, financial institutions. An OPC can also raise funds by converting into a Private Limited Company.
In a Person Company, a single person runs a company limited by shares whereas a Sole Proprietorship means an entity that is run by one individual, and the owner and business are considered as the same entity.
GST registration for a Person Company is necessary if the supply of goods or services is in another state irrespective of annual turnover.
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