WHAT IS ONE PERSON COMPANY(OPC) AND ITS INCORPORATION ?

 

ONE PERSON COMPANY (OPC)

The concept of One Person Company (OPC) is a new concept in India. It was launched through the Companies Act 2013, under section 2(62) of the act a single person is allowed to incorporate a company. Before this section, individuals were not allowed to establish a company on their own and had to opt for a sole proprietorship if they wanted to start a business.

The companies Act 2013 provides a one person company (OPC) the features of a private limited company and the benefits of a sole proprietorship. As per Section 2 (62) of the Companies Act 2013, a company can be formed with just one director and one member, making it easier for individuals to establish a company. The registration process for an OPC in India requires only one member and one director, who can be the same person.

The compliance requirements on a One Person Company are very fewer as compare to a private limited company, making it an attractive option for entrepreneurs. Both resident and non-resident Indians can register an OPC in India.

Benefits of a One Person Company

There are several benefits available to a one person company incorporated in India, which include:

Incorporation Point of View: A one person company can be incorporated with just one member and one director, which makes it, takes lesser time and cost to set up as compared to other types of companies.

Legal Status Point of View: the legal status of a one person company is a separate legal entity from its member. It can own property in its name, enter into contracts, and sue or be sued in its own name. This provides the member with a distinct identity and protects their personal assets from legal disputes.

Liability Point of View: the one of the most attractive benefits of a one person company is that the liability of the member is limited to the extent of their shareholding in the company. This means that the personal assets of the member are not at risk in case the company faces financial difficulties.

Credibility Point of View: A one person company has better credibility in the market than sole proprietorship, as it is a registered legal entity. This increases the reputation of company and makes it quick and easy to attract investors, partners, and customers.

Going Concern: A one person company is a going concern and has perpetual existence, which means that its existence is not affected by the insolvency, death or retirement of its member. The company can continue to operate and fulfill its obligations even after the death of member.

Tax Benefits Point of view: An OPC is eligible for several tax benefits and incentives provided by the government but there is nothing special tax benefit as compare to private limited company.

Overall, registering a One Person Company in India provides entrepreneurs with various benefits; the main benefit of single ownership makes it an attractive option for those looking to start a business with limited liability and reduced compliance requirements.

Incorporation requirements

A one person company can only registered on Ministry of corporate affairs portal www.mca.gov.in.

To incorporate One Person Company, following documents are required:

Director related Documents

PAN card of director

Aadhaar of director

 ID proof:  DL/Voter ID/passport of Director (ANY ONE)

Address proof: bank statement/postpaid mobile bill/utility bill (ANY ONE)

Passport size photos of director

Email address and mobile numbers of director

Occupation of director

Education detail of director

Other Documents and information

Two proposed name of Company

Detail of business activity

Rent Agreement

NOC from Landlord

Utility bill not older than 2 months

Nominee detail also required.

It is advised to the readers although it seems that the process of registration is simple and easy but do not try to register an OPC themselves because there are some complication than only a professional can understand. Therefore avail professional services for the same.

CA KHALID REHMAN

(M.com,Chartered Accountant)

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