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To understand one person company definition, we first need to get into the identity it creates. A registration provides corporate status and many benefits to the members and directors. In the case of a Private company, at least two members are required which is not the same in the case of OPC. To eliminate this drawback and allow a single person to reap the advantages of One Person Company, this sort of a company structure is introduced through the Companies Act, 2013. One Person Company registration is simplified with online filing and process.
One Person Company feature is such that it has only one shareholder who owns 100% stake of the company. To maintain the character of perpetuity, the appointment of the nominee is compulsory, who will take place of the owner in case of death or his inability. One person company is a type of Private Limited Company.
A One Person Company would obtain the status of a separate legal entity. Such OPC registration ensures that the entity is separate from the owner, unlike a proprietorship firm. OPC can own the assets in its own name and enter into a contract with the parties. The actions of the company are independent of the owner. This is the main benefit of OPC registration.
A Single Person Company is benefited with an exemption to many compliances unlike a private company. Compliances like holding General and Board Meeting, etc. are not applicable to OPC. However, Board Meeting must be held if more than one director is on Board.
One of the benefits of registering OPC lies in the separate legal entity of the company where the liability and obligations are not charged over the personal assets of the sole member. The liability of a member is limited to the unpaid amount of the capital subscribed by the member. Even in the case of liquidation, the personal assets of the member are protected, except in certain specified cases.
Even if the OPC is owned by sole personnel, the owner may appoint a director owing up to the responsibility to operate and run a company. The operational duties are assigned to the director(s) whereas the member would be able to fetch profits channeling efforts towards other businesses. However, in One Person Company, the shareholder holds complete control over being a stakeholder.
No. The requirement to provide minimum paid-up capital for OPC registration is now removed. The amount required for starting a business must be subscribed while registering OPC. Further, the subscriber must hold at least one share for registration. It is important to note that the minimum amount of INR 1 Lakh must be kept as Authorized Capital.
Only an individual can become a member of OPC. One needs to be an Indian resident above the age of 18 years to be eligible to form One Person Company. To refer one as an Indian resident, he/she must have spent at least 182 days in India in the immediate previous calendar. An additional condition is that a person can become member of only 1 OPC at any time during or after registration.
A person who is a minimum of 18 years i.e.; major, and is an Indian resident. Additionally, the nominee must provide his consent to the company for his/ her appointment.
Daily transactions of the business are recorded in the Books of Accounts of the Company by the Accountant/s. The Accounts hence recorded are verified by an Independent Auditor to make sure that no statutory compliance are missed and provide an Audit Report for the same.
(Note: arjlegal.in shall only take the accountability of the Accounting Service provided by them but however shall help in appointment of Independent Auditor for your business.)
Director Identification Number is a unique number assigned by the Ministry of Corporate Affairs to Individuals on application made. This allows any individual to be a Director in any Company or Designated Partner in LLP.
Digital Signature Certificate is provided in the form of a token issued by Certified Authorities. Any form that is filed for an online OPC registration in India shall be submitted after affixing the DSC of an Applicant. Also, the directors will require a DSC for DIN application and the nominee and shareholder shall possess DSC for submitting e-forms for incorporation.
Authorised capital shows the maximum amount of capital that a company can raise by way of issuing shares at present or in the future. The Paid-up Capital refers to the actual amount raised by the company i.e. amount paid by shareholders upon issuance of shares. One can register One Person Company in India by any amount of paid-up capital, which can be less than authorized capital but not exceeding such.
Yes, an OPC can carry multiple businesses if it is mentioned in the MoA of the company and approved by the registrar. The company can mention more than one business which is related and from the same field. Activities which are unrelated such as fashion designing and event management or construction cannot be registered under the same company.
Yes, a company can be registered at a commercial or a residential place by furnishing necessary proof. A registered office is a place where communication, if any, from MCA and other concerned authorities, will be received. The address will also be displayed at the portal of Ministry.
No, only an individual can obtain membership or become the nominee in OPC. If a body corporate wants a 100% stake of any company, it can register a wholly owned subsidiary.
No, the shareholder must be an Indian resident for OPC company registration.
It is required to convert an OPC into a Private or Public Company when the paid-up capital of the OPC exceeds 50 lakh Rupees, or the Average Annual Turnover during the relevant period exceeds 2 Crore Rupees. The mandatory conversion will take effect irrespective of the period of existence of OPC.
During every financial year, the company must hold board meetings in case of more than 1 director. Furthermore, the accounts and financial statements must be audited by an independent auditor. Subsequently, it shall file form AOC – 4 and MGT – 7 as a part of Annual Compliance within the given time.