One-Person company advantages of one person company | {India 2020}
- legal karle
- Jan 27, 2020
- 4 min read
is for those businesses that want to have complete control over their company. The Companies Act 2013 introduced the One person company in order to support entrepreneurs capable of using their own venture. OPC is the best option for those who do not like to work under others.
In a one-person company, only one person is required to start a company whereas in private limited and LLP company more than 2 persons are required to register a company. As per section (2) of the companies act 2013, a one-person company can be formed with just 1 director or member. In one person company registration, the compliance requirement is also limited.
Eligibility to start a one-person company-:
The person applying for OPC should be a natural citizen and national of India not involved either as a member or nominee of any other such concern
Minimum 1 lakh authorized capital is required to start a One Person company.
Who can be the owner in One Person company?
An individual, who is born and is a resident of India or has lived in India for at least 182 days in India can become a member of the one-person company.
Who can be a director?
An individual qualified under the Indian Companies Act, 2013 to be a director, holding the valid Director Identification Number (DIN) can be a Director of the One Person Company. Unlike common perception and practice in the case of Private Limited Company, a person other than shareholders can also hold the directorship in the company. Minimum 1 director must be appointed for OPC Registration in India.
Who can be the nominee?
For the uninterrupted existence of the company, the company act 2013 prescribes to appoint a nominee for the company. A nominee shall be individual and it can be appointed at the time registration of one person company. The nominee appointed for one person company can also be changed at any time after the incorporation
One person company registration provides the benefits of both private limited and limited liability companies. It provides various advantages such as limited liability, separate legal entity just like the private limited company. If we count the number of small enterprises being set up, one proprietorship still leads because it has no cost of establishing and also has a flexible procedure to register.
Benefits of One Person Company registration-
Sole Proprietorship: One person company registration, only a single promoter and one director is required. It is the best option for those who want complete authority and control over their business. According to section 2(62) of the companies act 2013, one person and the director is required to register the one-person company.
Minimal compliance: In one person company registration there are very limited required for compliance filings.
Separate legal entity: One Person Company is a registered separate legal entity under the Companies Act 2013 by the government of India. A one-person company is a legal entity and juristic person for the law.
Lifelong existence: One person company has perpetual existence, the one person company will keep on existing in law even after the death of shareholders/directors or company becomes bankrupt/insolvent.
The ownership of one person company can easily be transferred by transferring the shares of the company
Annual compliance of One person company
Income Tax Return an annual return filing must be completed by all before 30th September of each financial year.
GST Filing: Under the GST regime proposed to be rolled out in 2017, one person companies having would be required to file monthly, quarterly and annual GST returns.
TDS Filing: Quarterly must be filed by one person companies that have TAN and are required to deduct tax at source as per TDS rules.
ESI Return: ESI return must be filed by all one-person companies having ESI registration is required once the one person company employs over 10 employees.
What is the procedure of One Person company registration?
1. Apply for DSC: The first step in the one person company registration is to obtain the Digital Signature certificate. It is the digital format of the following documents
Address Proof
Aadhaar card
PAN card
Photo
Email Id
Phone Number
2. Apply for DIN: After obtaining DSC
the next step is to register for the Director Identification Number. DIN is the 8 digit identification number by provided central government anyone intending to be director of any company. It is valid for Lifetime as long as the person remains the director of the prescribed company.
3. Name Approval Application: The next step while in One Person company registration is to decide on the name of the Company. The name of the Company will be in the form of OPC private limited. Similarly in private limited company, it is required to add a suffix of Pvt. Ltd. at the end of the name of the company.
4. Documents Required: The next step is to prepare all the documents which are required for the One Person company. Following are the documents which are required for one person company registration-:
a. Memorandum of Association ( MOA):
MOA are the objects to be followed by the Company or stating the business for which the company is going to be incorporated. It basically prescribes all the objectives of the company.
b. The Articles of Association (AOA): It lays down the by-laws on which the company will operate.
C. Registered office proof
d. PAN card of the director
e.Scanned passport size photo of the director
f. Bank statement of the director
5. Filing of forms with MCA:
All these documents will be attached to SPICe Form, SPICe-MOA and SPICe-AOA along with the DSC and DIN to be uploaded on MCA site.
After uploading, Form 49A and 49B will be generated for the PAN and TAN generation of the Company which have to be uploaded to MCA after affixing the DSC of the proposed Director.
6. Issue of the certificate of Incorporation:
On verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and you can commence your business activities.
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