One Person Company
A One Person Company (OPC) is the latest variety of business in India projected by the companies Act, 2013.
A forward-thinking plan was launched that promotes the incorporation of micro-businesses and persons with entrepreneurial concepts and to provide uplift to entrepreneurs who have high potential to start their venture by allowing them to create one person company.
It is said that “A One Person Company is a paradigm shift in the Indian corporate regime, bringing it at par with global standards.” As per section 3(1)(c) of the Companies Act, 2013, an OPC may be formed for any lawful purpose by one person being a citizen of India.
OPCs have been provided with a number of exemptions and therefore have lesser compliance related burden.
Organized Sector Of Proprietorship Company:
The organized version of OPC will open the avenues for more favorable banking facilities. Proprietors always have unlimited liability.
√ minimum 1 shareholder
√ minimum 1 director
√ the director and shareholder can be same person
√ minimum 1 nominee
√ no need of any minimum share capital
Members: One-person Company can have Minimum or Maximum no. of 1 Member.
Suitable only for small business: OPC is suitable only for small business.
Business activities: one person company cannot carry out non – banking financial investment activities including investment in securities of anybody corporates.
Perpetual succession: This is Very concept of a separate legal entity being created for a perpetual succession that is continuation of the company even after the death or retirement of a member is also challenged.
But now as per Section 2(62) of the Company’s Act 2013, a company can be formed with just 1 Director and 1 member. It is a form of a company where the compliance requirements are lesser than that of a private company.
Apply for DSC
Apply for DIN
Name Approval Application
Filing Forms with MCA
Issue of certificate of Incorporation
One Person Company
As per provision of section 2(62) of the Companies Act, 2013 defined (62) “one person company” means a company which has only one person as a member.
For the formation of OPC – Only a natural person who is an Indian citizen and resident in India-
shall be eligible to incorporate a One Person Company;
shall be a nominee for the sole member of a One Person Company.
The term “resident in India” means a person who has stayed in India for a period of not less than 182 days immediately preceding one calendar year.
Once we have decided to register an OPC we should be aware of the cons of an OPC also. Pros we have already seen.
We can only incorporate only one OPC. The law does not permit the incorporation of more than one OPC by the same owner. This is the same case with regards to the nominee of an OPC also. A nominee of an OPC cannot be a nominee of another OPC.
A minor cannot become a nominee or can hold shares of a beneficial interest in an OPC.
An OPC cannot enjoy the status of an OPC after achieving the ceiling limit as prescribed by the Companies Act, 2013. The rules state that where the paid-up capital of a PC exceeds Rs. 50 lakhs and its average annual turnover exceed Rs.2 crores. Upon crossing the above-mentioned threshold it should be converted to a private or public company. The conversion should take place within 6 months.
It cannot voluntarily convert into a private or public company unless it has completed two years from the date of incorporation except in point (3).
Many of us feel that the cost of registration is cheaper than that of the private company. But in practice, that is not the case. The cost of registration depends upon the authorized capital.
Disadvantages of the One Person Company
1. High Tax Rate
As a corporate form, you cannot avail of the tax slab advantage. In proprietary, you are required to pay according to your salary at 10%, 20% or 30% tax rate. But in the case of one person company, you are directly charged 30% income tax. The high tax rate is a big disadvantage of a one-person company.
2. Consistency Cost
Compliance cost of partnership firm or proprietary is very low compared to One Person Company.
3. OPC is included in Name
You are required to specify a one-person company in your company name in the bracket. There is a slightly lower impression that the organization is kept running by one and only person. Another side, if you start your company with a couple of shareholders, the administration can’t be dedicated, and you can offer impressions to customers moreover.
One Person Management
A shareholder is one, and that person makes all the decisions. On the off chance that he is insightful, it is excellent; however, in some cases, cross-check is required for business development. The company’s success and growth are all dependent on one person’s decision-making ability.
5. OPC Incorporation is allowed
You can incorporate one and only OPC (One Person Company). If you need to start another company as OPC, it is not permitted. In today’s quick economy, more than one business can differentiate income and spare you from enormous misfortunes. One and an only stream of business is unsafe these days. Having this condition is a snag for serial business people.
One Time Fee
Service Provide Within 7 Days
One Time Fee
Service Provide Within 15 Days
Services Provided Before the Due Date
OPC has to mandatorily convert itself into private or public company when the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover of immediately preceding three consecutive financial years exceeds two crore rupees. The process of inform to ROC by the form INC 5 it shall be filed within sixty days of exceeding threshold limits.
Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC.
Only one OPC, he can be member.
A Nominee can be change with their consent by filing form INC-4.
Yes, by filing Form INC-6 an OPC can be convert into private or public company
Form INC-6 shall be filed within 30 days in case of voluntary conversion and within six months of mandatory conversion