Corporate laws in India revolutionised with the advent of a new concept that led to a unique way of starting a business with accorded flexibility. According to Section 2(62) of the Companies Act 2013, One Person Company (OPC) is a company with only one person as a member.
Features of One Person Company
- It is formed by one person only for any lawful purpose, who must be an Indian citizen or has lived in India for more than 120 days during the previous calendar year.
- OPC is a private company managed by a single member as a separate legal entity.
- A sole member of the OPC must appoint a nominee while registering the company.
- No minor shall become a member or nominee of the OPC or can hold share with beneficial interests.
- The appointed nominee can manage the OPC and work as a successor in case of a member’s demise or disability.
- OPC requires a minimum of one director and can have a maximum of 15 directors.
- The liability of the shareholder/director is limited.
- OPC cannot be converted or incorporated into a company.
- It cannot carry out non-banking financial activities, including investment in corporate securities.
- It has a low registration cost and fewer rules and regulations compliance.
- No minimum paid-up capital is required.
Benefits of One Person Company
- Easy to operate, thus making the decision-making faster.
- It enjoys several privileges and exemptions under the Companies Act.
- No statutory audit or GST registration is required if the turnover is less than Rs. 40 lakhs.
- OPC does not have to hold Annual General Meetings.
- Directors can sign the annual returns , company secretary is not required for the same.
- Financial statements need not include cash flow statements.
- A minimum authorised capital of Rs.1 lakh is required to incorporate the OPC, but no paid-up capital is required.
- OPC can be easily dissolved without any legal process.
- It is easy to raise funds for an OPC through venture capital.
Procedure for Registration of OPC
- OPC is registered online on the Ministry Of Corporate Affairs (MCA) website.
- Apply for the Digital signature certificate (DSC) of the company’s director, with a self-attested copy of the documents.
- Apply for the Directors Identification Number (DIN).
- After the approval of DSC, the challan amount is paid online.
- Apply for the name approval. The name of the company will end with ‘OPC Private Limited’. At least 2 to 3 names should be suggested for the company’s name.
- Memorandum of Association (MOA) and Article of Association (AOA) are submitted to the Registrar of Companies (ROC).
- Declaration and consent of the director are required on Form INC-9 and DIR-2, respectively.
- The declaration is required by the professional verifying that all the compliances have been fulfilled.
- On verification, the ROC will issue the certificate of incorporation along with PAN and TAN.
Documents required
- PAN card of the member and the nominee.
- Address proof:- Driving licence, Adhaar card, and proof of residence of the member and the nominee.
- Latest bank statement, mobile phone bill (postpaid), Telephone bill, the electricity bill of the premises
- A coloured passport-size photograph of the member and the nominee
- Proof of address of the registered office.
- NOC of the landlord and the copy of the rent agreement.
- A copy of the sale deed is required in case the property is self-owned.
One Person Company recognises a person’s economic entity and lightens a path for small traders and service providers to venture into business by enhancing their opportunities through corporate identity.
