OPC is a mix of sole proprietorship and company form of business. It enables a single person to run a business and at the same time enter the corporate industry. It provides key features of a Pvt ltd company such as separate legal entity and limited liability. But at the same time it is a sole proprietorship. It is a popular form of business which came into being after the introduction of The Companies Act, 2013. This form of business is apt for small to medium investors. Most e-commerce businesses would profit from this business model as there will be less fuss in decision making and at the same time, be a registered company. It is best for a single person who wants to run his business alone and make it global.
The following are the features of a one person company:
- Only a citizen of India can become a shareholder or director of the company.
- Nominee of shareholder required. In case of the proprietor’s death, the nominated person becomes the shareholder of the company.
- No of directors shall be minimum 1 and maximum 15
- Minimum paid up capital of 1,00,000 INR required
The advantages that an OPC enjoys are:
- Separate legal entity
- Continued existence
- Borrowing capacity
- Easy transferability
- Owning property
- Limited liability
- Registered office not required
- Legal status
- Corporate identity
- Easy access to loans and funding from banks
- Tax saving
- Less compliances
Exemptions given to a One Person Company:
- The annual returns of One Person Company will be signed by the company secretary or by the director of the company.
- Provisions relating to General Meetings, Extra Ordinary General Meeting and Notice Convening to General Meeting are not applicable to One Person Company as there is only a sole member.
- OPC can have a maximum of 15 directors which can be increased by passing a special resolution.
- The OPC shall file with the MCA a copy of financial statements duly adopted by its member along with all the documents which are required to be attached to such financial statement, within 180 days from the closure of the financial year along with cash flow statements.
- The financial statement shall be signed by only one director.
The documents required for incorporation of OPC are:
- Id proof
- Address proof
The procedure for incorporation of One Person Company is:
- Obtain DSC
- Obtain DIN
- Select name and apply for the same
- Draft MOA and AOA
- Signing various documents
- Payment of fees and stamp duty
- Scrutiny of documents at the registrar of companies
- Receipt of certificate of incorporation
Time to Register One Person Company
The time required for the incorporation is 14-20 working days.
Cost to Register One Person Company
The cost of registration varies from vendor to vendor, it normally cost around 10,000 to 15,000 INR.