One Person Company (OPC) formation is easy when done by InternationalTaxations.com, for the first time incorporate One Person Company sitting at home. Our professional team will help you to register your OPC across India. We will extend our support in documentation, Preparation, filing and subsequent Follow-up with ROC including Memorandum and Article Preparation.
The concept of One Person Company (OPC) in India was introduced to support business person who on their own are capable of starting a venture by allowing them to make one person economic entity. one among the most important advantages of a 1 Person Company (OPC) is that there are often just one shareholder as 100% ownership in an OPC, while a minimum of 2 members are required for incorporating and maintaining a personal Ltd. or a indebtedness Partnership (LLP). Almost like a personal Ltd., a 1 Person Company is a separate legal entity from its promoter, offering indebtedness protection to its sole shareholder, while having continuity of business and being easy to include.
Though a 1 Person Company allows a lone Entrepreneur to work a company entity with indebtedness protection, an OPC does have a couple of limitations. As an example , all Person Company (OPC) must nominate a nominee Director within the MOA and AOA of the corporate - who will become the owner of the OPC just in case the only Director is disabled. Also, a 1 Person Company must be converted into a personal Ltd. if it crosses turnover of INR. 2 cores annually and must file audited financial statements with the Ministry of Corporate Affairs (MCA) at the top of every fiscal year like all kinds of Companies. Therefore, it's essential for the Entrepreneur to carefully consider the features of a 1 Person Company before incorporation.
The concept of 1 Person Company in India was introduced by Company Law dated 31st May, 2005. As per the report, Dr. Irani recommended that with the increasing use of data technology and emergence of a robust service sector in India, it had been time for the govt to empower entrepreneurs who on their own are capable of developing ideas and participating within the marketplace. He suggested that entrepreneurs who on their own are capable of starting a venture shouldn't be made to try to to it through an association of persons, and will be ready to create one person economic entity within the sort of ‘One Person Company’. Further, it had been also suggested that such an entity could also be given an easier regime through exemptions in order that the only entrepreneur isn't compelled to spend his time, energy and resources on procedural matters.
This led to the introduction of “One Person Company” within the Companies Bill 2013, which got its assent within the Lok Sabha on 18 December 2012 and within the Rajya Sabha on 8 August 2013. After obtaining the assent of the President of India on 29 August 2013, it's become the businesses Act, 2013.
Till the introduction of 1 Person Company in India, the indebtedness and Continuous Existence feature was only available to an association of persons like a personal Ltd. or indebtedness Partnership or a Ltd. . With the introduction of OPC (One Person Company ), the indebtedness and continuous existence feature is now also available for One Person Company, which is an entity with only one member. Together Person Company has only one member, it's necessitated by the law for the only member of the corporate to designate another person within the Memorandum of Association, who on the event of member’s death or incapacity shall become the person to member of OPC. This mechanism provides an adequate safeguard to make sure continuous existence of the entity even just in case of incapacitation of the only member.
All companies in India are required to carry an annual general meeting annually, additionally to the other meetings and less than fifteen months should elapse between the dates of subsequent annual general meetings. One Person Company is exempt from holding an AGM or extraordinary general meetings. The resolution signed by the only Director and entered into the minute’s book is sufficient, in lieu of a General / Extraordinary General Meeting.
Every company in India is required to organize and file financial statements that have record, profit and loss account, income statement, statement of changes in equity and explanatory notes. Just in case of 1 Person Company, income statement isn't required.
Till the introduction of 1 Person Company (OPC) in India, the indebtedness & perpetual existence feature was only available to an association of persons like a personal Ltd. or indebtedness Partnership or a Ltd. With the introduction of 1 Person Company, the indebtedness and perpetual existence feature is now also available for One Person Company, which is an entity with only one member. Together Person Company has only one member; it's necessitated by the law for the only member of the corporate to designate another person within the Memorandum of Association, who on the event of subscriber’s death or incapacity shall become the person to contract. This mechanism provides an adequate safeguard to make sure continuous existence of the entity even just in case of incapacitation of the only member.
All companies in India are required to carry an annual general meeting annually , additionally to the other meetings and less than fifteen months should elapse between the dates of subsequent annual general meetings. One Person Company is exempt from holding an AGM or EGM. The resolution signed by the only Director and entered into the minute’s book is sufficient, in lieu of a General / Extraordinary General Meeting.
Every company in India is required to organize and file financial statements that have record, profit and loss account, income statement, statement of changes in equity and explanatory notes. just in case of 1 Person Company, income statement isn't required.
Before discuss the conception of a one person company (OPC), let us have a quick interpretation of the types of companies that can be formed. A company can be registered for a lawful purpose by the following number of persons:
Unlike a PVT. LTD. , a OPC has certain restrictions related to its formation. Hence, before starting an One Person Company formation, it’s crucial to know the restriction and make sure the promoter is eligible as per the law to register an One Person Company.
Thus, a OPC are often formed by an Indian citizen who has his/her presence in India for a minimum of 182 days during the immediately preceding financial year as per law .Finally, an OPC is prohibited from having a minor as its member.
The rules for registration of one person company (OPC) requires that the sole member of a OPC should and its include the name of a nominee in the Companies Memorandum, who undertakes the entity after the expiry or incapacity of the former member. Moreover, the document ( e-Form INC-3) must contain the written consent of the nominee, which must also be filed with the Registrar during registration along with spice + e-form.
The nominee can withdraw his/her consent, in that case the sole member have to nominate another member as a legal heir within 15 days of the notice of withdrawal. The nomination of new nominee must be inform to the Company through a written consent in prescribed form. The OPC, in turn, is required to Inform the notice of withdrawal of consent of former nominee along with the intimation of the new nominee with the Registrar of Companies in Form eForm INC-4.
The Main member of a 'OPC' is allow to change the nominee of the OPC for any reason whatsoever, by giving notice in writing to the OPC. Again, the new nominee must provide his consent to the nomination in eForm INC 3, and the OPC must file the notice of change and consent of the new nominee with the Registrar of Companies along with the fee applicable, within 30 days of form the date of receiving information of change.
If a nominee becomes sole member of the one person company due to the cessation of the former member's term due to death or incapacity of the latter, the new member must appoint a nominee as a replacement for OPC.
The process for registration of a OPC can be divided into 4 steps as under:
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Read MoreDigital signature certificate (DSC) must be applied for the sole member and the nominee for processing the registration. Application for DSC would require passport size colour photos of the memer, identity proof as PAN card copy and ID proof having address.
In parallel to the Digital Signature Certificate (DSC) application, the application for name reservation of OPC can be submitted to the MCA by filing form Spice +. Name approval applications are processed by the Ministry of Corporate Affairs in 24-72 hours. The name suggested must conform to the naming guideline issued in law, and the name of the One Person Company must at end or include the words (OPC).
Ones name has been approval by MCA, registration application can be filed to the MCA in form spcie + with signed Memorandum (MOA) and Articles (AOA) including nominee form. Further, the ID proof, address proof and residence proof of the solo member and nominee would be required to filed along with the eForm Spice + . In addition to the MOA, AOA, identity proof, address proof, other incorporation documents like declaration in form INC-9 of the sole promoter must be submitted. Further, the consent of the nominee director must also be attached in eForm INC-3.
On filing of eForm Spice + for registration of OPC , and approved by the Registrar of Companies (ROC). In case there are any issues with the documents submitted originally, the application for registration of OPC can be resubmitted.
Once the incorporation certificate is issued by ROC, the One Person Company would start the process of opening of bank account. InternationalTaxation.com can help you up to open a bank current account. Once the bank account is opened, the solo member must deposit the amount mentioned in the Memorandum of the One Person Company.
Once, the equity share capital is deposited into the Bank's current account; the One Person Company can file the eForm-20A for the commencement of business to MCA. Commence of Business certificate must be obtained with 180 days from date of registration to avoid a penalty.