ONE PERSON COMPANY
One Person Company is a new and useful concept in India which is usually introduced by The Companies Act 2013. It is one of the best ways to start up a new company. It is a legal entity separate from its member, offering limited liability protection to its sole member. OPC is adequately a company that has only one shareholder as its member.
How to form OPC’s (One Person Companies)
A single individual can make an OPC by subscribing his name to the memorandum of association and fulfilling other requirements lay down in The Companies Act, 2013. Such a kind of memorandum just states the details of the nominee who shall become the company’s single-member. If in case of an original person dies or incapable to involve in all these contractual relations.
Along with an application of registration, the memorandum and the nominee consent to his nomination should be filled to the registrar of the companies. They can get back their names at any point in time by submission of requisite applications to the registrar. The nomination of that person can also later be removed by the member.
Benefits of One Person Company Registration
- Separate Legal Existence
A One Person Company would obtain the status of a separate legal entity. Such OPC Registration ensures that the entity is separate from the owner, unlike a proprietorship firm. OPC can own the assets in its own name and enter into a contract with the parties. The actions of the company are independent of the owner. This is the main benefit of OPC registration.
- Lower Compliance Requirements
A Single Person Company is benefited with an exemption to many compliances unlike a private company. Compliances like holding General and Board Meeting, etc. are not applicable to OPC. However, Board Meeting must be held if more than one director is on Board.
- Limited Liability of Owners
One of the benefits of registering OPC lies in the separate legal entity of the company where the liability and obligations are not charged over the personal assets of the sole member. The liability of a member is limited to the unpaid amount of the capital subscribed by the member. Even in the case of liquidation, the personal assets of the member are protected, except in certain specified cases.
- Separation of Management and Ownership
Even if the OPC is owned by sole personnel, the owner may appoint a director owing up to the responsibility to operate and run a company. The operational duties are assigned to the director(s) whereas the member would be able to fetch profits channeling efforts towards other businesses. However, in One Person Company, the shareholder holds complete control over being a stakeholder.
Exemptions of One Person Company
OPC’s enjoy the following privileges and exemptions under The Companies Act 2013:
- They do not have to hold Annual General Meetings (AGM’s).
- Their Financial Statements need not include Cash Flow Statements.
- There is no need to sign the annual returns by the Secretary of the company; The Director can also do the same.
- Provisions relating to independent Directors do not apply to them.
- Their articles can provide for additional grounds for vacation of a Director’s office.
- Several provisions relating to meetings and quorum do not apply to them.
- They can pay more remuneration to Directors than compared to other companies.
Documents Required for Online OPC Registration
- PAN Card-PAN Card of shareholder, nominee, and Directors.
- Identity Proof-Aadhar card and Voter ID/ Passport/ Driving License of Shareholder, Nominee, and Directors.
- Director’s Address Proof-Latest Telephone Bill /Electricity Bill/ Bank Account Statement of Shareholder, Nominee, and Directors.
- Photograph-Latest Passport size photograph of Shareholder, Nominee and Directors
- Business Address Proof-Latest Electricity Bill/ Telephone Bill of the registered office address
- NOC from Owner-No Objection Certificate to be obtained from the owner(s) of registered office
- Rent Agreement-Rent Agreement of the registered office should be provided, if any
Eligibility for OPC Registration
Only a natural person who is a citizen of India and resident in India:
- Is eligible to incorporate an OPC
- Is eligible to be a nominee for the sole member of an OPC.
- A Resident of India is a person who has stayed in India for at least 182 days in the preceding 1 year.
- If an OPC exceeds a turnover of over Rs.2 crore or has a paid-up capital above Rs.50 lakhs, it must be turned into a private or public limited company within six months