The credit of incorporating One Person Company in India is given to the Companies Act, 2013 that created it with the goal of supporting businessman who are capable of starting a progress on their own by permitting them to build a single economic entity. The biggest advantage of starting an One Person Company (OPC) that one can yield is that there can be only a single individual in a OPC , whereas a minimum of two members are mandatory for registering and preserving a Private Limited Company or a Limited Liability Partnership (LLP). Just like a Company, a One Person Company is a separate authorized body from its advertiser, providing limited liability protection to its one and only shareholder, at the same time as having everlasting continuation of business and being an effortless structure to register.
Thus an OPC structure can be determined as amalgam form of structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as known as a shareholder.
Sujata Associates is the best India’s leading business consultant that provides company registration services in India, as well as offers a wide range of company registration services like private limited company registration, one person company registration and etc. People can assist more services offered by Sujata Associates by click of a mouse, as by accessing its official website sujataassociates.com.
1. A One Person Company is always incorporated as a private limited company. 2. It must have been only a single member at any point of time and may have only a single director during its tenure. 3. The words “One Person Company” must be mentioned or included in brackets below the name of the company. 4. One person cannot incorporate more than a single OPC or become a nominee in more than a single OPC. 5. No minor shall become member or nominee of the One Person Company or hold a share with the interest of gaining monetary benefits.
The largest advantages of starting an One Person Company is that no other director or subscriber is required as the name hints that only a single person is required to form the company . Below there are certain advantages of incorporating One Person Company:
When an One Person Company is registered as a body it will be carried by the characteristic of Lifetime Continuation and will result in making it easy for businessman to increase capital for business. The OPC is a non-natural body from its proprietor. Hence, it should be the caution about their claims against the business that can’t be squeezed against the administrator.
Minimum Requirements - An OPC requires a Minimum 1 Shareholder, Minimum 1 Director (The director and shareholder) can be same person, Minimum 1 Nominee, Minimum Share Capital shall be Rs. 1 Lac (INR One Lac). Letters ‘OPC’ to be suffixed with the name of OPCs to distinguish it from other companies.
Easy Access to Bank Loans - Banking and financial institutions favor to lend money to the company instead of proprietary firms. In most of the cases Banks insist the entrepreneurs to transform their firm into a Private Limited company before sanctioning funds. So it is smarter to register your startup as a One Person private limited rather than proprietary firm.
A Separate Identity – One Person company holds the chief characteristic of a separate legal entity and is proficient enough for doing the whole thing that an entrepreneur will do.
Abundant amount of protection - In case of death/disability of the single person should be provided through appointment of another individual as contender director. On the termination of the original director, the contender director will manage the affairs of the company till the date of transmission of shares to legal heirs of the terminated member.
Benefit of Small Scale Industries - An One Person Company is capable of acquiring various benefits offered to the Small Scale Industries like low Interest rates on loans, easy funding from bank without depositing any security amount to a certain limit, various benefits under Foreign Trade policy and etc. Such benefits can be adored by any business during its starting years.
OPC registration requires barely few so documents, which are as follows :
• Reservation application of name in INC-1.
• Identity proof, address proof and PAN card copy of nominee and member.
• Written Consent of Nominee in form INC-3.
• Memorandum and Affidavit of sharer for form INC-9.
• Application for Company Registration.
• Registrar Office Address in Form INC-22.
• Registered office's address proof.
Procedure of Registering One Person Company –
Any person who is willing to start a One Person Company can easily register with the help of leading business consultant Sujata Associates by submitting these documents and appointing a candidate who becomes the accountable person from the company in case of death or incapacity of registered director.
Subsequent steps are to be taken in order to register for One Person Company:
• First, the proposed director, or the person who wants to register the company on his/her name has to submit his Digital Signature Certificate to the registrar office. After this step , he/she is provided with a Director Identification Number (DIN) stating his rights in the company.
• The Next step involves selecting the suitable name for the company. A person can select any name which he/she wants, as long as the name is available. After submitting the desired name, the Ministry of Corporate Office checks the availability of the proposed name. If the name is not available, they would propose an alternative name for the company.
• The proposed director needs to arrange the Memorandum of Association and Article of Association along with the other documents.
• There is a minimal fee and stamp duty which the director has to pay. After that, the Registrar of Companies confirms the documents.
• If the whole thing goes very well, the director receives the registration certificate which guarantees that the one person company is incorporated in his name.
One Person Company is the only type of corporate entity that can be started and operated by a single promoter with limited liability protection in India. A corporate form of legal entity in One Person Company ensures that the business has perpetual existence and easy ownership transfer-ability.
A company has 'perpetual succession', meaning uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership.
Ownership of a business can be easily transferred in a company by transferring shares. The signing, filing and transfer of share transfer form and share certificates is sufficient to transfer ownership of a company. In a one person company, the ownership can be transferred by altering the shareholding, directorship and nominee director information.
Banks and Financial Institutions prefer to provide funding to a company rather than partnership firms or proprietary concerns. However, a one person company cannot issue different types of equity security, as it can only be owned by one person at all times.
A company being an artificial person, can acquire, own, enjoy and alienate, property in its name. The property owned by a company could be machinery, building, intangible assets, land, residential property, factory, etc., Further, the nominee director cannot claim any ownership of the company while serving as a nominee director.