ONE PERSON COMPANY
ONE PERSON COMPANY
A company having Only One director or one member known as One Person Company (OPC). It shall also be important to note that Section 3 classifies OPC as a Private Company for all the legal purposes with only one member. OPC is applicable to all the provisions related to the private company , unless otherwise expressly excluded.
The concept of One Person Company in India was introduced through the Companies Act, 2013 to support industrialists who on their own are capable of starting a venture by allowing them to create a single person economic entity. One of the biggest advantages of a One Person Company (OPC) is that there can be only one member in a OPC, while a minimum of two members are required for incorporating and maintaining a Private Limited Company or a Limited Liability Partnership (LLP). Similar to a Company, a One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder, while having continuity of business and being easy to incorporate.
One Person Companies are helping tremendously in increasing the overall economy of India. More and more Entrepreneurs are coming up and setting up their business. Since, no intervention from any third party is seen, it makes it more beneficial.
One Person Company, which is a new concept in India, already sees a big boom. A huge impact on the economy and development of nation is expected. It gives opportunities to many and will therefore bring creative and young minds in front of everyone. So, if you want to start up your own business, you don’t have to worry about all the complex and tedious processes.
Though a One Person Company allows a lone Entrepreneur to operate a corporate entity with limited liability protection, a OPC does have a few limitations. For instance, every One Person Company (OPC) must nominate a nominee Director in the MOA and AOA of the company - who will become the owner of the OPC in case the sole Director is disabled. Also, a One Person Company must be converted into a Private Limited Company if it crosses an annual turnover of Rs.2 crores and must file audited financial statements with the Ministry of Corporate Affairs at the end of each Financial Year like all types of Companies. Therefore, it is important for the Entrepreneur to carefully consider the features of a One Person Company prior to incorporation.
DOCUMENTS REQUIRED FOR ONE PERSON COMPANY REGISTRATION
Copy of PAN Card of owner
Passport size photograph of owner
Copy of Aadhaar Card/ Voter identity card
Copy of Rent agreement(If rented property)
Electricity/ Water bill (Business Place)
Copy of Property papers(If owned property)
Landlord NOC (Format will be provided)
ADVANTAGE OF ONE PERSON COMPANY
- Limited Liability
- Separate Legal Entity
- Uninterrupted Existence
- Borrowing capacity
- One Shareholder
- One Director
- One Nominee
- One Person
Register a one person company in 7 to 15 days, subject to government and client processing time.
Digital Signature & DIN
Digital Signature Certificate (DSC) and Director Identification Number(DIN) is required for the proposed director of the one person company. DIN and DSC can be obtained for the proposed director in 2 to 4 working days.
A minimum of one and a maximum of six name choices can be submitted to the government. Subject to availability, company naming guidelines and government processing time, name approval can be obtained in 2 to 4 working days.
On obtaining company name approval, incorporation documents must be submitted to the government along with an application for registration. The government will usually approve the application for incorporation in 5 to 7 days, subject to their processing time.
STEPS FOR INCORPORATION OF OPC
Step 1. Obtain DSC and DIN:
The proposed directors must obtain a Digital Signature Certificate(DSC) from 8 authorised DSC makers.
Step 2. Reservation of name:
An application for the reservation of a suitable name must be made in Form No. INC-1.
Step 3. Entrenchment Provisions:
In case the articles of association contain provisions for entrenchment, the company must inform the Registrar of such provisions in Form No.INC-2 at the time of incorporation of the company or in case of existing companies (by amendment of the articles of association), the same must be filed in Form No.MGT-14 within 30 days from the date of entrenchment of the articles.
Step 4. Articles of Association:
Model articles of association have been provided in Tables F, G, H, I and J of Schedule I, as are applicable, and can be adopted by a company either in totality or otherwise.
Step 5. Application for incorporation of OPC:
An application must be filed, with the Registrar of Companies(ROC) within whose jurisdiction the registered office of the company is proposed to be situated, in Form No.INC-2.
Step 6. Signing of Memorandum and Articles of Association:
The MOA and AOA of the company must be signed by the sole member who is also the subscriber to the memorandum, who must give details of his name, address, description and occupation, if any, in the presence of at least one witness who must also attest the signature and must also sign and give his details.
Step 7. Affidavit of Subscriber and the director:
The affidavit must be submitted by sole member who has subscribed to the memorandum and named in the articles in Form No.INC-9.
Step 8. Particulars of Subscriber:
The sole member must file the particulars of subscription with the Registrar at the time of incorporation.
Step 9. Nomination by the sole member:
(1) The subscriber to the memorandum of a One Person Company must nominate a person, after obtaining prior written consent of such person, who shall, in the event of the subscriber’s death or his incapacity to contract, become the member of that One Person Company. (2) The name of the person nominated shall be mentioned in the memorandum of One Person Company and such nomination in Form No INC-2 along with consent of such nominee obtained in Form No INC-3.
Step 10. Declaration by professionals:
The declaration by an Advocate, a Chartered Accountant, a Cost accountant or Company Secretary in practice shall be in Form No. INC-8.
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