One person company (OPC) in India is one of the easiest forms of corporate entities to manage.
One person company is a hybrid of Sole-Proprietorship and Corporate form of business.
One Person company Registration opens up new business opportunities for sole proprietors and entrepreneurs who also wish to enjoy the advantages of limited liability, and a separate legal entity as well.
The One Person Company (OPC) was introduced by the Companies Act 2013 to assist entrepreneurs who are capable of starting a business on their own by allowing them to form a single person organisation.
A registered one-person company (OPC) is a limited-liability entity with only one owner. This individual is a shareholder as well as a director. The liability of the owner is limited to the amount of capital he has invested. In an OPC, a single promoter gains full authority over the company thereby, restricting his/her liability towards their contributions to the enterprise.
Easy to Obtain Funds: As OPC is a private company, it is simple to raise funds from venture capitalists, angel investors, incubators, and other sources.
Legal Status: The OPC is granted its own legal entity status by the member.
The OPC is a separate legal body that protects the single person who has incorporated it.
Less Compliance: The Companies Act of 2013 exempts the OPC from certain compliance requirements. The cash flow statement does not have to be prepared by the OPC.
Easy Management: Since a single person can establish and run the OPC, it becomes easy to manage its affairs.
Perpetual Existence: The OPC has the feature of perpetual succession even when there is only one member.
Suitable for only small business: OPC is well suited to the structure of a small firm. At any given time, the OPC can have not more than one member. To obtain more funds, OPC cannot add more members or shareholders. Thus, with the expansion and growth of the business, more members cannot be added.
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 distinction between ownership and control is becoming increasingly blurred, perhaps leading to unethical commercial activities.
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.
Verification of documents
Application for Name Approval (online RUN WEB Application on MCA Portal)
Obtaining DSC (Class-2) and DIN as required above. However, in new companies DIN can be obtained within SPICe + facility
Incorporation of company along with filing of e-MOA and e-AOA
Providing you Certificate of Incorporation
Filing of Commencement of business certificate after 180 days.
Certificate of Incorporation
The title of the document filed in many states to create a corporation. Also known as the articles of incorporation or corporate charter.
The individuals who, acting as a group known as the board of directors, manage the business and affairs of a corporation.
Limited liability is a form of legal protection for shareholders and owners that prevents individuals from being held personally responsible for their company's debts or financial losses.
A procedure that allows a corporation to obtain exclusive use of a corporate name for a specified period of time.
No, a person can be a member in only one OPC.
An OPC is prohibited from giving any invitations to public to subscribe for the securities of the company.
An OPC can be converted voluntarily into a private limited company by passing a special resolution after increasing the minimum number of members and directors to two. No Objection Certificate (NOC) in written form from the creditors must be obtained for the conversion of OPC to a private limited company.
There is no specific tax advantage to an OPC over any other form of company. The tax rate is flat 30%, other tax provisions like MAT & Dividend Distribution Tax (DDT) apply as they apply to any other form of company.
A minor, a foreign citizen, a Non-Resident, and any person incapacitated by contract will not be eligible to become a member.
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