OPC (One Person Company) is for entrepreneurs & small traders, only one person is required for incorporating the business.
OPC One Person Company Registarion in India by Radium Box
As per Companies Act, 2013, OPC is defined as a company having one person as its member meaning thereby OPC is effectively a company that has only one shareholder as its member. One of the biggest advantages of an OPC is that there can be only one member in an OPC, while a minimum of two members is required for incorporating and maintaining a Private Limited Company or a Limited Liability Partnership. Similar to a Company, an OPC is a separate legal entity from its members, offers limited liability protection to its shareholders, has continuity of business and is easy to incorporate.
Every OPC must nominate a nominee Director in the MOA or AOA who will become the owner of the OPC in case the promoter Director is disabled. It must file audited financial statements with the Ministry of Corporate Affairs at the end of each Financial Year. Therefore, it is important for the Entrepreneur to carefully consider the features of an OPC before incorporation. Legal Suvidha Providers can help incorporate a One Person Company (OPC) in India. So, before incorporating OPC following things must be kept in mind:
• Only a Natural person who is a resident of India can form OPC but not AOP, Body corporate, Company, etc.
• One can only be the member of one OPC or the nominee of one OPC only.
• Conversion of OPC is necessary after paid-up share capital exceeds Rs. 50 L or the average annual turnover exceeds Rs. 2 Cr. in 3 immediately preceding financial year.
• Rules of OPC do not permit Non-Banking Financial Institutions.
• An OPC should not be confused with Sole proprietorship i.e. promoter is not personally liable in case of an OPC.
STATUS OF PRIVATE COMPANY
As per S. 3 of the Companies Act, 2013, OPC is given the status of Private Companies.
VARIOUS EXEMPTIONS FROM
An OPC enjoys various statutory exemptions from holding annual or extraordinary general meetings; signature on annual returns can be done by Director himself, restriction on voting rights, demand for the poll, notice for the meeting, Signature on financial statements, etc.
LIMITED LIABILITY
The liability of the shareholder is limited and personal assets are safe. The liability of the shareholder will only be limited to the unpaid subscription money in his name. OPC is a separate entity and there will be a true distinction between the promoter and the company.
SINGLE OWNER
There is only one owner who can act both as a shareholder as well as the director.
COMPLETE CONTROL
This leads to fast decision making and execution. Yet he/she can appoint as many as 15 directors in the OPC for administrative functions, without giving any share to them.
LEGAL STATUS & SOCIAL RECOGNITION
One Person Company is a Private Limited Structure in the eyes of law, which gives suppliers and customers a sense of confidence in business.
SEPARATE LEGAL ENTITY
A company is a legal entity and a juristic person established under the Act. Therefore a company form of organization has a wide legal capacity and can own property and also incur debts. The members (Shareholders/Directors) of a company have no liability to the creditors of a company for such debts.
EASY COMPLIANCES
OPC is one of the easiest forms of corporate entities to manage. Very few ROC filing is to be filed with the Registrar of Companies (ROC). No need to conduct the Annual General Meeting (AGM), so lesser compliance cost.
PERPETUAL SUCCESSION
A company has 'perpetual succession', that is continued or uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.
BORROWING CAPACITY
A company enjoys better avenues for borrowing of funds. It can issue debentures, secured as well as unsecured and can also accept deposits from the public, etc. Even banking and financial institutions prefer to render large financial assistance to a company rather than partnership firms or proprietary concerns.
EASY TRANSFERABILITY
Shares of a company limited by shares are transferable by a shareholder to any other person. Filing and signing a share transfer form and handing over the buyer of the shares along with a share certificate can easily transfer shares.
OWN PROPERTY
A company being a juristic person, can acquire, own, enjoy and alienate, property in its name. No shareholder can make any claim upon the property of the company so long as the company is a going concern.
