About One Person Company
A new concept has been introduced in the Company’s Act 2013, about the One Person Company (OPC). One person company is suitable for small companies where the turnover is not likely to cross Rs. 2 Crores, and the maximum amount of capital is limited to Rs. 50 Lac. An OPC can have more than one director. However, one of them must be an Indian Resident. The OPC can be registered by Indian Citizen Only, and FDI is not allowed in an OPC.
Shareholder nominates another person as a nominee in case of death or incapacity of the shareholder. One person company was introduced in the companies act 2013 to encourage self-employment.You can not incorporate more than one person company or be a nominee of more than one OPC. Rules of OPC company do not permit Non-Banking Financial Institutions.
Complete Control of the Company with a Single Owner
This leads to fast decision making and execution. Yet OPC can appoint as many as 15 directors for administrative functions, without giving any share to them.
Easier Return Filing
While it is mandatory for an OPC to get its accounts audited and file requisite annual returns, the same can be easily done with the signature of the director; the need for a company secretary’s signature is not mandatory.
Easy to raise fund
It is easy to raise fund for an OPC from various sources such as Angel investors, venture capitals or other financial institutions.
To register a one-person company all you need is to have at least Rs. 5000 in your bank account.
One Person Company with a bad credit score can even apply for the loan. The credit score of OPC will not be material if the score of OPC is as per the norms.
Benefits under Income Tax Law
Unlike proprietorship, any remuneration paid to the director is highly applicable as a deduction as per income tax.
Minimum Requirements For OPC Registration:
- Minimum 1 Shareholder
- Minimum 1 Director
- The director and shareholder can be the same person.
- Minimum 1 Nominee
- Letters ‘OPC’ to be suffixed with the name of OPCs to distinguish it from other companies
Documents Required for Registration
The registration process requires submission of few documents:
- Scanned copy of Passport sized photograph of the director.
- Self attested and scanned copy of the Voter’s ID card/Driving license/Passport.
- PAN card is a mandatory required document for the registration process.
- Valid address proof — For registering one person company the director must submit the valid address proof. It’s quite important to appear the name of the director on the address proof exactly same as written on the PAN card.
- Ownership Proof (Electricity bill, Gas Bill etc) of the registered office
- NOC of the registered office address.
- Contact details of Directors.
- Email-id of Directors.
Step-1 : Choose an Appropriate Name for the Company
It is not possible to register a name that is too similar to an existing company name or trademark. When it comes to name of company, a degree of freedom is given by the companies’ act 2013, however, there are certain rules and restrictions that are
Step-2 : Applying for DSC
The directors to get a Class 2 DSC (Digital Signature Certificate) to sign electronic documents after which DIN (Director Identification Number) can be applied for.
Step-3 : Execution of company registration documents
After the company name approval, the company incorporation documents such as memorandum of association (e-MOA) and articles of association (e-AOA) have to be executed by the promoters in the prescribed format along with documents i.e. consent to act
Step-4 : Company incorporation E-form submission
For successful completion of process, it is required to submit the e-forms with the MCA on the website for the purpose of approval.
Step-5 : Get Certificate of Incorporation
On the approval of E-Form (SPICe INC-32), the Certificate of Incorporation is provided via E-mail.