There are some limitations over OPC model. For instance, every One Person Company (OPC) must have a nominee who will succeed the OPC in case of death or disability of the sole owner / shareholder. There are certain exemptions to OPC from the provisions of the Companies Act, 2013 at the same time, OPC must be converted into a Private Limited Company if it crosses, either an annual turnover of Rs. 2 Crore or paid – up share capital of Rs. 50 Lakhs and it must file audited financial statements with Registrar of Companies at the end of each Financial Year like all types of Companies.
ONE PERSON COMPANY REGISTRATION
The concept of One Person Company in India was introduced through the Companies Act, 2013 to safeguard the unique ideas and intellect like Patents with the person who is inventing such ideas, by creating single person economic entity. The great advantage of a One Person Company (OPC) is that there is only one member in OPC, while a minimum of two members are required for incorporating and running a Private Limited Company or a Limited Liability Partnership (LLP). Similar to a Company, a One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder.
However, there are some limitations over OPC model. For instance, every One Person Company (OPC) must have a nominee who will succeed the OPC in case of death or disability of the sole owner / shareholder. There are certain exemptions to OPC from the provisions of the Companies Act, 2013 at the same time, OPC must be converted into a Private Limited Company if it crosses, either an annual turnover of Rs. 2 Crore or paid – up share capital of Rs. 50 Lakhs and it must file audited financial statements with Registrar of Companies at the end of each Financial Year like all types of Companies. Therefore, it is important for the Entrepreneur to carefully choose the form of a One Person Company prior to incorporation.
LEGALRAJ is always there to assist people in company registration services in India, offering a variety of company registration like private company registration, public company registration, one person company registration, Nidhi Company Registration, Section 8 Company Registration, Producer Company Registration. The average time taken to complete a one person company registration is about 5 - 15 working days, subject to government processing time and client document submission. Get a free consultation for company registration and business setup in India by scheduling an appointment with an LEGALRAJ consultants’.
What is the One Person Company (OPC) ?
A One Person Company is a latest concept under the Companies Act, 2013 which gives most preferred form of business organization best suited for very small firm or company. It is mainly a Private Limited Company but have only one memberwith his/ her Nominee as a promoter which is run by at least 1 Director. However, there is no restriction on number of Directors on the Board of OPC. This type of business entity fulfills two desires at a time viz, One person owns business hence it is a Proprietary firm and also it has limited liability as body corporate form under the Companies Act, 2013.
Being a very small scale organization and highest preferred business model, it has been recognized by various govt. bodies for exemption from various compliance requirements and concessions in taxes and govt. funding.
What will you receive in Company registration package ?
DIN of Directors
DSC of Directors
Memorandum of Association & Articles of Association
appointment of Shareholder’s Nominee
PAN & TAN
Post Incorporation compliances
Filing of Declaration of Commencement of Business
Advantages of One Person Company (OPC) Registration:
1. Separate Legal Entity (Management & ownership is separate):
Private Limited Company is a legal entity and a juristic person established under the Companies Act, 2013. Hence, a company has a wide range of legal capacities and the members (Shareholders/Directors) of a company have no personal liability to the creditors of a company for company's debts.
2. Sole Business Ownership:
Sole ownership of business provides stability in operations and affairs of the business entity since it has no situations like conflict of interest in the shareholders group as there is only one shareholder and that is what makes this business model A Center of Attraction.
3. Perpetual succession gives longest business life:
Private Limited Company has 'perpetual succession', which means uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by death or other departure of any member and it continues to be in existence irrespective of changes in ownership.
4. Easy Borrowings:
One Person Companies can raise funds through borrowed funds as per the requirements very easy due to its corporate model of business which enables the OPC to convert its borrowings into shares in case of thin situation. Companies can also issue equity shares, preference shares, debentures and accept deposits as per the provisions of Companies Act, 2013. Banks and Financial Institutions also prefer to provide funding to a company rather than partnership firms or proprietary concerns.
5. Owning Property in own name:
Private Limited Company being an artificial person, can acquire, own, and alienate, property in its own name. The property owned by a company could be machinery, building, intangible assets, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company - as long as the company is a going concern.
6. Growth & expansion:
OPC is based on a principle of sole ownership and Centralized Management System which enables the Company to achieve greater potential of growth and significant contribution to the economy of the Country at micro level due to 100% focus is on a business.
7. Small business can take benefit of MSME status:
OPC starts from very micro level. At this point profitability and security of its own trade interests is very difficult to manage. Hence, this Companies can take Undyog Aadhaar under MSME Act, 2006 and regulations made thereunder for being considered itself as a Small Scale Industrial unit and get significant concession on statutory Govt. Fees upto 50%such as discount to MSME registered Companies for Trade Marks registration under Trade Marks Act, 1999 and other government funding and so many other benefits currently available under Income Tax Act, 1961, Copyrights registration, Patents registration, etc….
8. Start up registration for Income Tax benefits:
If your business is uniquely identified and has potential for generating the large scale employment opportunities, then you can register your One Person Company (OPC) under Govt.’s Start-Up India Scheme and take huge Income Tax Benefits for at least 5 years and the status of Self-Certifying Entity.
What are the minimum requirements for Registering a Company in India?
Only 1 Shareholder and his Nominee *
There is no minimum capital requirements
DSC of the shareholder of proposed Company
Unique Name for the proposed Company
Registered office Address of the Company
* (The Directors and Shareholders can be the same persons.)
What is next after registration of Company ?
Appointment of 1st Auditors
Opening of Bank Accounts
Filing of Declaration for Commencement of Business in form INC-20A
Minutes of Board meeting and their committees
GST registration of the Company
Obtaining the IEC No.
Trade Marks/ Copyright Registration
Start up registration
Share Certificates to the subscribers
Statutory Registers preparations
Filing of Form AOC-4
Filing of Form MGT-7
What is the procedure for Company registration ?
Step 1: Obtain the DSC Tokens of all the shareholder
Step 2: Apply for Name Reservation
Step 3: Prepare and filing of Form Spice Form INC-32 for incorporation
Step 4: Obtain the Certificate of Registration
Step 5: File Form INC-20A for Declaration of Commencement of Business
The entire process for registration of Company will take at least 7 to 15 working days from the receipt of all the necessary documents and filing with the ROC.
What Documents are required for Company Incorporation ?
Copy of PAN Card of Director & Promoter
Passport size photograph of Director & Promoter
Copy of Aadhaar Card/ Voter identity card/ Valid Passport/ voting ID card of Directors & Promoter
Copy of Rent agreement (If rented property)
Electricity/ Gas bill/ Water Bill/ Electricity Bill/ Bank Statement for Office of Company
Copy of Index II or Property Tax Receipt (If owned property)
Landlord NOC (Format will be provided)
Precautions to be taken while name reservation
Meaningful: The name of your company should have some meaning even though more than two words combination is used. The name taken by the promoters of the Company should not be able to be challenged by anyone.
Unique: It should not create resemblance with the existing Company or LLP names or even the Trade Marks (either registered or in the process of registration).
Activity reflecting: In the name of your proposed Company, activity or main business object should be reflected or represented.
Should not be illegal / offensive: The name of your company should not be against law. It should not be abusive or against the customs and beliefs of any religion.
Is there any benefits available to a One Person Companies (OPCs) under Start-Up India ?
Small Companies, Private limited and One Persons Companies are three types of Companies which forms large part of the total companies in India. All these small scale business units / Companies are the actually the growth indicators of the Country’s Economy such as Concepts like Start Up India, Make in India, Digital India, etc… whichare the most successful recent govt. initiated programmes to strengthen the growth potential of the Indian businesses at micro level.
One of the Programme is Start Up India which gives the following enlisted benefits as per the scheme:
Self-Certification: Self-certify and comply under 3 Environmental & 6 Labour Laws.
Tax Exemption: Income Tax exemption for a period of 3 consecutive years and exemption on capital and investments above Fair Market Value.
Easy Winding of Company: In 90 days under Insolvency & Bankruptcy Code, 2016.
Startup Patent Application & IPR Protection: Fast track patent application with up to 80% rebate in filling patents.
Easier Public Procurement Norms: Exemption from requirement of earnest money deposit, prior turnover and experience requirements in government tenders.
SIDBI Fund of Funds: Funds for investment into startups through Alternate Investment Funds.
To take above mentioned benefits it very much necessary to get your Company or LLP or Partnership or Proprietary Firm register under this Start Up Scheme.
Following is the Eligibility Criteria for Startup Recognition:
The Startup should be incorporated as a Private Limited Company or registered as a Partnership Firm or a Limited Liability Partnership.
Turnover should be less than INR 100 Crores in any of the previous financial years.
An entity shall be considered as a startup up to 10 years from the date of its incorporation.
The Startup should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth.
An entity formed by splitting up or reconstruction of an existing business shall not be considered a "Start-up".