One Person Company registration
One Person Company
The Companies Act, 2013 completely revolutionized corporate laws in India by introducing several new concepts that did not exist previously. On such game-changer was the introduction of One Person Company registration concept. This led to the recognition of a completely new way of starting businesses that accorded flexibility which a company form of entity can offer, while also providing the protection of limited liability that sole properietor or partnership firm lacked.
Several other countries had already recognized the ability of individuals forming a company before the enactment of the new Companies Act in 2013. These included the likes of China, Singapore, UK, Australia, and the USA.
Definition of One Person Company
Section 2(62) of Companies Act defines a one-person company as a company that has only one person as to its member. Furthermore, members of a company are nothing but subscribers to its memorandum of association, or its shareholders. So, an OPC is effectively a company that has only one shareholder as its member.
Such companies are generally created when there is only one founder/promoter for the business. Entrepreneurs whose businesses lie in early stages prefer to create OPCs instead of sole proprietorship business because of the several advantages that OPCs offer.
Difference between OPCs and Sole Proprietorships
A sole proprietorship form of business might seem very similar to one-person companies because they both involve a single person owning the business, but they’re actually exist some differences between them.
The main difference between the two is the nature of the liabilities they carry. Since an OPC is a separate legal entity distinguished from its promoter, it has its own assets and liabilities. The promoter is not personally liable to repay the debts of the company.
On the other hand, sole proprietorships and their proprietors are the same persons. So, the law allows attachment and sale of promoter’s own assets in case of non-fulfilment of the business’ liabilities.
Features of a One Person Company
Here are some general features of a one-person company:
Private company: Section 3(1)(c) of the Companies Act says that a single person can form a company for any lawful purpose. It further describes OPCs as private companies.
Single-member: OPCs can have only one member or shareholder, unlike other private companies.
Nominee: A unique feature of OPCs that separates it from other kinds of companies is that the sole member of the company has to mention a nominee while registering the company.
No perpetual succession: Since there is only one member in an OPC, his death will result in the nominee choosing or rejecting to become its sole member. This does not happen in other companies as they follow the concept of perpetual succession.
Minimum one director: OPCs need to have minimum one person (the member) as director. They can have a maximum of 15 directors.
No minimum paid-up share capital: Companies Act, 2013 has not prescribed any amount as minimum paid-up capital for OPCs.
Special privileges: OPCs enjoy several privileges and exemptions under the Companies Act that other kinds of companies do not possess.
Benefits of One Person Company
One person company registration has all benefits will a corporate enjoys aside to this it has some relaxations in provision of company law. Following are some of benefits of One Person Company. It has separate legal entity. The liability of shareholder/ director is limited The organized version of OPC will open the avenues for more favorable banking facilities Legal status and social recognition for your business. It gives suppliers and customers a sense of confidence in business. The director and shareholder can be same person On the death/disability company can be succeed by nominee. Exemption available from various provisions under Company law.
Incorporation of OPC Types of OPCs can be incorporated under the Act.
There can be five types of OPCs that can be incorporated under the new Act, viz. OPC Limited by Shares; OPC Limited by Guarantee with Share Capital; OPC Limited by Guarantee without Share Capital; Unlimited OPC with Share Capital, and Unlimited OPC with Share Capital. Steps for Incorporation of OPC Incorporation through SPICe (Without filling RUN) Stakeholders can avail of 5 different services (Name Reservation, Allotment of Director Identification number (DIN), Incorporation of New Company, Allotment of PAN and Allotment of TAN) in one form by applying for Incorporation of a new company through SPICe form (INC-32) with eMoA, , eAOA. Incorporation through SPICe (With RUN) Name reservation: RUN service shall be used for name availability. Incorporate OPC: After name approval, form SPICe shall be filed for incorporation of the OPC within 20 days from the data of approval of RUN. The company shall file form INC-22 within 30 days once form SPICe is registered in case the address of correspondence and registered office address are not same. Certificate of Incorporation When the eForm is processed and DIN is generated, an acknowledgement email of Certificate of Incorporation (CoI) is sent on email. Further, on approval of SPICe+ forms, the Certificate of Incorporation (CoI) is issued with PAN and TAN as allotted by the Income Tax Department. An electronic mail with Certificate of Incorporation (CoI) as an attachment along with PAN and TAN is also sent to the user.
Conversion of Private Limited Company to OPC
A private company other than a company registered under section 8 of the Act may convert itself into One Person Company registration by passing a special resolution in the general meeting. The company shall file an application in Form No.INC.6 for its conversion into One Person Company along with fees as provided in in the Companies (Registration offices and fees) Rules, 2014, by attaching the following documents, namely:- The directors of the company shall give a declaration by way of affidavit duly sworn in confirming that all members and creditors of the company have given their consent for conversion, the list of members and list of creditors; the latest Audited Balance Sheet and the Profit and Loss Account; and the copy of No Objection letter of secured creditors.
Steps for One Person Company registration (OPC)
Step 1: Apply for DSC
Step 2: Apply for Director Identification Number
Step 3: Name Approval Application
Step 4: Documents Required
Step 5: Filing Forms with MCA
Step 6: Issue of certificate of Incorporation
CA Goyal Mangal & Co. provides services of one person company registration.
