Everything you must know about OPC

by Gaurav Bansal Company Registration Consultants in Delhi

For every sole entrepreneur who desired to incorporate their company, the year 2013 brought the biggest gift. Through Companies Act 2013 the concept of One Person Company was introduced in India. Prior to the introduction of One person company concept, no sole member could incorporate a legal structure.  Thus if a single person wanted to start his business he either had an option of operating as sole proprietor or pool in one more person for incorporating the private limited company.  Operating as sole proprietor has multiple disadvantages like unlimited liability, no legal structure, less trust of consumers etc.  With this blog, we will understand the complete aspects of One Person Company in India.

What is One Person Company?

One Person Company is the business structure that combines the features of both company and the sole proprietorship firm.  As the name suggest One Person Company is a business vehicle that can be incorporated by 1 member who can act as both the director and the shareholder. Due to which the person is able to get out of the hassles of finding out the perfect partner for incorporating the company. OPC works on the motive that you are not required to share your idea with anybody if you have the idea you can start now.

Important points to be noted before incorporating an OPC

•    A natural person who is a resident in India in the preceding calendar year is only eligible for forming a One Person Company.

•    One person can be a member of only 1 OPC.

•    No minor is empowered to become the member or nominee of the One Person Company or hold the share with any beneficial interests.

•    An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any corporate body.

•    Once an OPC is formed it cannot convert itself into any other form of the company voluntarily.  However when the threshold limit (paid-up share capital) is increased beyond Rs.50 Lakhs or its average annual turnover during the relevant period exceeds Rs.2 Crores i.e then the OPC has to mandatorily convert itself into the Private or Public Company, within a period of Six Months on breaching the above threshold limits.

Benefits of OPC

Following are the benefits of One Person Company-

•    Limited Liability- The liability of the sole member of the one person company is limited to his own share as the one person company is considered as a separate legal entity from its member.

•    Fewer Compliance requirements-The compliance requirements for one person company is comparatively very less as compared to other forms of companies like the private limited company, public limited company etc.

•    Legal status- Registration of One Person Company helps them to attain a legal status and recognition in the business world. Further, it gives the suppliers and customers a sense of confidence in the business entity.

•    Perpetual succession- The life of the one person company is not affected by the life of its sole member. As in case of death/disability of the sole person another individual nominated as nominee director can be appointed. On the demise of the original director, the nominee director will manage the affairs of the company till the date of transmission of shares to legal heirs of the demised member.

•    Easy to obtain loans- Due to their legal status many Banking and financial institutions prefer to lend money to the company rather than proprietary firms.  So it is better to register your startup as a One Person private limited rather than proprietary firm.

Documents required for OPC Registration

•    Self-attested PAN card copy.

•    Four Photographs.

•    Self-attested copy of any one of the Identity Proof like Driving License, Passport, Voter ID &Aadhar Card

•    Self-attested copy of any one of the Address Proof like Bank Pass Book/Bank Statement, Telephone Landline Bill, Mobile Bill & Electricity Bill

•    Company Address proof Electricity Bill, Telephone Bill, Mobile Bill & Gas Bill and Rent Agreement (If Rented) And NOC for doing Business & for taking Registration

The procedure of One Person Company Registration

1.    For starting the one person company the proposed director is required to obtain Digital Signature & DIN.

2.    Further if a person desire to obtain name approval it may file the RUN form in advance to Ministry of Corporate Affairs (MCA).

3.    Furtherthe documents for approval of name, incorporation documents i.e MOA and AOA etc. can be filed with MCA. Pay the ROC fees and stamp duty digitally according to the authorized capital of the company.

4.     If the ROC is satisfied with the documents filed it may approve the company and provides the certificate of registration for it.

Important provisions with respect to Nominee Director 

It is mandatory for every OPC to appoint a Nominee director. In case the member of OPC dies the person nominated by such member shall be the person recognized by the company. Such nominee will have rights and obligations just like the sole member of the company. When the nominee becomes the member of the company he is required to nominate any other person with the prior written consent of such person who shall in the event of the death of the member, become the member of the company.

Closure

In case of inactivity of OPC for more than a year it can voluntarily apply for closure or order of the Tribunal. The strike off application should be filed within 30 days from the date of signing the statement of Assets and Liabilities as required in filing on closure.

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Created on Jun 1st 2018 00:06. Viewed 206 times.

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