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All you need to know about One Person Company

All-you-need-to-know-about-One-Person-Company

What is One Person Company Registration?

The one person company was introduced in the Companies Act in 2013 and before that, the concept of a one person company registration did not exist as of on paper. A one person company registration in India comes under the umbrella of the private limited companies. A private limited company is called a one person company when it has only one person at its core (director). This means that to register one person company in India, only one director is required. The only shareholder of a one person company registration is its sole member. OPC regsitration in India have certain advantages over the sole proprietorship firm registration and that is why individuals with an unshared purpose and vision tend to start up their business organization by one person company registration online.

DOCUMENTS REQUIRED FOR ONE PERSON COMPANY REGISTRATION PROCESS

  1. Copy of PAN Card of the Proposed Director & Nominee.
  2. Passport size photograph of the Proposed Director & Nominee.
  3. Copy of Aadhaar Card/ Voter identity card of the Proposed Director & Nominee.
  4. Bank Statement (not older than 2 months) is required from both Director and Nominee.
  5. In case of rented property for office, copy of Rent agreement is required.
  6. Electricity/ Water bill of the proposed office area.
  7. In case of Own Property for Office, copy of utility bill with NOC is required.

CHARACTERISTICS OF ONE PERSON COMPANY REGISTRATION PROCESS

1. Member:

A OPC registration need not have a board of directors or an elaborate group of shareholders. As the name suggests, it just means that a one person company only has one core member. He/she is the sole shareholder as well as the director of the company. This gives the power to a single person to go on and register for OPC company single-handedly.

2. Private Company:

A One Person Company registration is a subtype of a private limited company company registration. According to the Companies Act, 2013, the one person company is a private limited company for all lawful purposes and legal proceedings.

3. Nominee:

The most distinguished characteristics of a one person company registration process lie in the fact that it is the only kind of company that needs a nominee before it comes into operation. The sole member or director of the company is asked by the concerned government agencies to nominate a nominee for the OPC registration process. The registration of a one-person company is incomplete without the nomination of a person by the only member of the company.

4. Succession:

Another important characteristic of this one person company registration is the nomination of a person second in charge under some circumstances. The nominee is selected by the director of the one person company to keep a person second in charge in case of any misfortunes like the sole director’s death. In such a case, the power of choosing to be the sole member of the company or letting the position go is given in the hands of that very nominee. He/she may or may not choose to take the position of the former director and this is what puts a one-person company in a lot of complications. There can be no succession to the one person company given these circumstances.

5. Capital:

The Companies Act of 2013 made it very easy for young entrepreneurs to go on and start up their own business firms and Companies without much complications and legal formalities. So, there has been no set minimum paid-up capital for a one person company registration process in India. An individual can invest as much money as he/she pleases as the initial investment for the OPC Company registration online which is one of its important characteristics.

ONE PERSON COMPANY REGISTRATION PROCESS IN INDIA

  1. The individual who is interested in OPC registration can do so by following a simple procedure prescribed by the Companies Act, 2013. The first step in this process is to submit a digital signature certificate to the concerned register office. If a person does not have a Digital signature certificate, he/she needs to first get one and then apply for Class 3 DSC signature of a one person company along with submitting a digital signature certificate.
  2. After this step is taken forward, the individual who has applied for a one person company registration process is provided with a Director Identification Number. The Director Identification Number (DIN) helps is legally announcing the rights of the concerned individual in the one person company. This document is an important step towards getting any form of business company or firm to register legally.
  3. The next most important step is to choose an appropriate name for your one person company registration. For getting your company successfully registered, you need to choose a name for your company and send this proposal to the Ministry of Corporate Affairs (MCA). The MCA then check the proposed name of the one person company for availability after verifying from their existing data, if your proposed name is approved, you can go ahead to the next step in the procedure. But if your proposed name is rejected by the Ministry of Corporate Affairs Office, then you will be notified to pick another name and repeat the process to check it’s availability. The Ministry also sometimes suggests an alternative name for your OPC registration online process.
  4. A Memorandum of Association ( MOA ) and Article of Association ( AOA ) along with other important documents. The proposed director of the one person company has to provide these documents while registering for the set-up of his/her one person company.
  5. A minimal OPC company registration fee is also needed to be deposited by the proposed director of the OPC registration after depositing the MOA, AOA and the digital signature certificate. After the fee has been successfully submitted, all the deposited documents are verified by the Registrar of Companies. It takes around 15-30 days for the process to be completed.
  6. If all the steps in the procedure are followed and the documents are also verified, then the proposed director of the One Person company registration receives the Certificate of Incorporation along with PAN and TAN of the company from the concerned government agencies.
  7. After getting the required documents of One Person Company, you can open up your Company’s Bank Account and start working.

ADVANTAGES OF OPC REGISTRATION ONLINE IN INDIA

1. Lesser Compliance Related Burden :

The One Person Company come under the umbrella of private limited companies and therefore, enjoy certain privileges of being a private limited company in legal terms. The Companies Act, 2013 has however exempted the One Person Companies from various provinces and hence this results in very few compliance-related burdens for the company.

2. Organised Sector :

Many sole proprietorship firms are now opting for converting into One Person Company registration in India because of various benefits. The One Person Company, under the private limited companies bracket, are more organized and structured than the proprietorship firms. Many small-scale business organizations can now enter and benefit from the corporate world because of the easy setup of the one person company registration process in India.

3. Limited Liability Protection :

Unlike in the sole proprietorship firms, the director of the One person Company is not responsible for any debts or financial problems of the company. The director of the OPC company registration has a limited liability whatsoever and his/her personal assets are not affected by the financial strains suffered by the one person company. This feature offering limited liability to the director of a one person company is quite advantageous in protecting one’s personal assets and that is why there is a movement from the sole proprietorship firms to the setting up of OPC company registration.

4. Easy to Manage and Get loans :

There is no official requirement for annual board meetings in a one person company. With only one director, it makes it very easy for him/her to manage the company and take it through his vision for the company’s success. Many banking firms are more inclined towards giving out loans to one person companies more easily than to other firms like the sole proprietorship firms.

DISADVANTAGES OF ONE PERSON COMPANY REGISTRATION IN INDIA

1. Restrictions related to the member :

As the name suggests, OPC company registration process needs to have only one member to be its sole shareholder, member as well as director. One of the drawbacks of this rule is that only Indian citizens and people with Indian residential address proof can apply for one person company registration in India in their name. Even the nominee required to register one person company needs to be a permanent Indian resident.

2. Small Business Companies :

The business structure of a one person company is only suitable for small business firms. Small enterprises with lower capital investments and profits. The limit for the maximum paid-up share capital is ₹50 lakhs to register a one person company in India. So, it is not suitable for a company with a big turnover to apply for a one person company registration.

3. Business Restraints :

A One Person Company has been forbidden to be incorporated in any other company or for that matter, to be made into a company of some other legal structure. Also, all non-banking financial investments can never be carried out in the name of a one person company.

Vakilgiri offers you a quick OPC Registration Online in India. We will help you in incorporating your OPC Company within 7 working days. The One Person Company Registration fees is also quite less with us as we want to be a helping hand in your future endeavours. Thus provides very cost effective Legal & IT services.

All you need to know about One Person Company
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