One Person Company is a newer type of business in India. This concept of a company under single ownership was introduced by the Companies Act of 2013. Many entrepreneurs are looking to incorporate One Person Company (OPC) in place of Private Limited Company or Limited Liability Partnership. Let’s have a look at the features of One Person Company.
Features of One Person Company (OPC):
A One Person Company as the name suggests needs only one member, unlike a Private Limited Company or a Limited Liability Partnership where a minimum of two members are required.
An OPC enjoys benefits of a limited liability, separate legal entity, perpetual succession etc, like Private Limited Company or Limited Liability Partnership.
Similar to a Private Limited Company, a one person company is required to nominate a successor in the event of the demise of the sole member. Such companies are also required to comply with many statutory requirements in the same manner as a Private Limited Company. However it is exempted from conducting Annual General Meetings or Extraordinary General Meetings.
Benefits of a One Person Company
- Limited liability: In event of failure, your liability extends only to business assets unlike private limited companies whose liabilities extend to your personal and private property and bank accounts.
- Exemption from compliance: certain sections of laws are not applicable for OPC such as section 96, 98 and sections 100 to 111
- No AGM: being a single ownership company, there is no need for holding an AGM or any extraordinary general meetings
Disadvantages of an OPC
- From taxation point of view One Person Company would be disadvantageous as it is taxed at 30% base rate.
- A person cannot be a member of more than five One Person Companies.
- Also an OPC status needs to be changed to Private limited Company once the business turnover crosses 2 crore or capital is increased beyond rupees fifty lakhs in the immediately preceding year.
In short, a One Person Company has its own advantages and disadvantages.Thus whether a single ownership company status is beneficial for you or not needs to be seen from a business perspective. For those starting a business, the choice is an ideal one considering the benefits.
One Person Company (OPC) can be incorporated by a natural person resident in India only. In order to register a one person company both the owner and nominee have to be resident of India. Nominee person is the person who will take charge of One Person Company (OPC) in case of death of sole member or in case the sole member becomes unable to become member of One Person Company. Registration of One Person Company is very much similar to that of Private Limited Company. You will need to obtain a DSC or digital signature certificate and DIN which should be applied on your application for the name of the company. Reservations of name need to be filed separately.
Once this is done a complete set of documents will need to be submitted to the Registrar of Companies. Incorporation documents includes Memorandum and Articles of Association, proof of appointment of nominee member, affidavit etc. Once the documents are verified and approved, the registrar of companies will grant you a certificate of incorporation of your company. This process generally takes around 15 days time.
Step By Step Procedures for Incorporating a One Person Company
- Select a company name
- Get your MOA and AOA drafted
- Sign all the documents. You can do this with a digital signature
- Payment of fees and stamp duty to ministry of affairs
- Document verification by ROC
- Issuance of certificate from ROC
MyEfilings: Affordable services for Registration of One Person Company (OPC)
If you want to know more about an OPC, then visit myefilings.com to get complete guidelines on the process. MyEfilings also provides you with services that will take you through the entire process all you need to do is to provide all the necessary documents to myefilings.com and then sit back and let us do the rest.
MyEfilings will acquire your OPC certificate in 7 days
MyEfilings can incorporate your One Person Company within 7 days through fast track process by filing INC-29. We will even create your digital signature certificate for signing your MOA online. The biggest benefit you gain from hiring the services of myefilings.com is the fast track process to incorporate your one person company in the shortest possible time.
To get in touch with our customer services now or call us on 022 6562 6270 / 6280 or write to us on firstname.lastname@example.org.