Under the provisions of The Companies Act, 2013 – One Person Company (OPC) can be registered with a single person who can be the owner as well as the director of the Company.
One Person Company
The introduction of the One Person Company into the legal system came into existence to encourage entrepreneurs to enter into the corporate world. It will not only enable the individual capabilities to contribute economic growth but will also generate employment opportunities.
Under the provisions of The Companies Act, 2013 – One Person Company (OPC) can be registered with a single person who can be the owner as well as the director of the Company.
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, but now he can register as OPC and enjoy the advantages.
One Person Company And Sole Proprietorship
BASIS | ONE PERSON COMPANY | PROPRIETORSHIP |
Legal status of entity | Separate legal entity | Not considered as a separate legal entity |
Liability | Liability of Shareholder/Director is Limited | Unlimited liability of Sole Proprietor |
Statutory Audit | Compulsory Statutory Audit for Books of Account. | Audit of Books of Accounts depend upon amount of Turnover. |
Annual filings | Filed with the Registrar of the Company | Income Tax Returns filed with Income Tax Department. |
Transferability | Allowed to 1 person only | Not allowed |
Taxation | Tax rate is 30% on profits plus cess and surcharge | Taxed as an individual |
Survival | Existence is independent of directors or nominee | Comes to end on death or retirement of the member |
Cost Of Registration | No much difference in registration cost of an OPC compared to Private Limited Company | No registration required to start the business |
Basic Mandatory Compliance For OPC
1. Board Meeting: At least one Board Meeting in each half of the calendar year and the time gap between the two Board Meetings should not be less than 90 days.
2. Books: Maintenance of proper books of accounts.
3. Audit: Statutory audit of Financial Statements.
4. Tax Returns: Filing of business income tax returns every year before 30th September.
5. Annual Filing: Filing of Financial Statements in Form AOC-4 and Annual Return in proposed Form MGT-7A.
6. Directors KYC: Filing form DIR-3 KYC for KYC of director of the company.
List of Exemptions Available To OPCs Under The Act
Following sections are not applicable to OPCs-
98(Power of Tribunal to call meetings of members, etc.)
100(Calling of EGM)
101 &102 (Notice of Meeting & Statements to be annexed to Notice) 103 (Quorum of Meetings)
104(Chairman of Meetings)
105(Proxies)
106(Restriction on Voting Rights)
107 & 108(Voting by show of Hands & by Electronic Mode)
109&110 (Demand for Poll & Postal Ballot)
111(Circulation of Member’s Resolutions)
Procedure Of Incorporation Of One Person Company
1. Application For Digital Signature Certificate –
The first step is acquiring the Digital Signature Certificate (DSC) of the Director.
2. Application for Name Approval –
The next step while registering an OPC is to make your mind as to what should be the name of the Company. The name of the company should be in the form of “Electrical supply (OPC) Private Limited”. The name is approved in the form SPICe+ Part A. After the name application has been approved by the MCA we can go ahead with the subsequent step.
3. Filing of SPICe Forms with MCA –
All the required documents are to be attached to the SPICe Form, SPICe-MOA, and SPICe-AOA with the DSC (Digital Signature Certificate) of the Director, will be then sent to the MCA for approval.
4. Certificate of Incorporation of One Person Company –
After the verification and approval, the Registrar of Companies (ROC) will issue a Certificate of Incorporation. The PAN and TAN have been generated automatically at the time of registration of the Company.
Documents Required for OPC Registration
Scanned copies of:
Copy of the subscriber PAN, Aadhar Card, Photo, Email & Mobile Number
Copy of subscriber Voter identity card/Driving License/ Passport
Copy of subscriber’s Bank Statement/any latest utility Bill in their name.
Copy of Utility Bill (Electricity Bill, Gas Bill, Wifi Bill, telephone bill) of the Registered Office along with No-Objection Certificate from the owner
Details of Nominee (PAN, Aadhar Card, Voter Id, Photo, Email & Mobile Number)
Note : All documents shall be self-certified. There is no requirement for submitting physical documents.
Conclusion
As you have now learned everything about a one-person company, it’s time to put your business dreams into reality. Everything in the procedure takes 07-10 working days (obtaining the necessary documentation, the application procedure, the name approval process), and finally, the registration of the OPC is done.
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One Person who is an Indian National and resident in India can register an OPC. Also, it requires another person as Nominee Shareholder. So, in effect you need TWO People for registering an OPC. The Primary Shareholder can also be a director.
Yes. The Nominee can withdraw his consent by giving a notice in writing to the sole member and to the One Person Company. In such case, the sole member shall nominate another person as nominee within fifteen days of the receipt of the notice of withdrawal.
Yes. The shareholder can change the nominee with an intimation in writing to the company at any time for any reason and can and nominate another person after obtaining the prior consent of new nominee.
The subscriber to the memorandum shall nominate another person as nominee after obtaining a written consent from such person. In the event of the shareholder death or incapacity to contract, the Nominee shall become the member of that OPC.
An OPC is prohibited from carrying Non-Banking Financial activities and Investment in securities of other body corporates.
Registered Office of the company can be shifted from one place to another in the same state or from one state to another after complying with legal requirements.
A Person can register only one OPC. Also, a person cannot become nominee in more than one OPC.
An Indian National (Individual), who is resident in India can only become a Shareholder or Nominee Shareholder in an OPC. Foreign Nationals, Non-Resident Indians, Companies and LLPs cannot become a Shareholder or Nominee Shareholder in an OPC.
OPC is a Company that has a separate existence and is owned by one single member. One person happens to be a mixture of proprietorship and company forms of business.
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.
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Disclamer: The article provided here is solely for information purposes. This is prepared based on information provided on various forums and the same has been utilized only for information of the readers. The information presented in this article does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice. In case of necessity, consult with professionals.
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