A new conception has been introduced in the Company’s Act 2013 regarding the One Person Company (OPC) where in a Private Company , a minimum of two Directors and two Members area required, whereas, in a Public Company, a minimum of three Directors and a minimum of seven members needed.
The introduction of Companies Act, 2013 has reformed the corporate laws in India. It has introduced several new concepts that did not exists previously. One Person Company is a new concept introduced with the Introduction of Companies Act, 2013.
Earlier single person is not eligible to incorporate a company. But now according to section 2(62) of the Companies Act, 2013 only 1 director and 1 member can start a company but with lesser compliance.
It is done to provide the advantages to start-up and Innovators and those who are providing the products and services on e-commerce platforms. One Person Company (OPC) has the blended featured of both sole-proprietorship and a private company. For example, a sole-proprietorship allows you to own the organisation completely, and in case of OPC there is just one shareholder. In private company liability of the members are limited, same terms are applicable to OPC as well.
Section 2(62) “One Person Company” means a company with only one person as a member.
Private Company :
Section 3(1)(c) of the Companies Act says that a single person can incorporate a company for any lawful purpose. It describes OPCs as private companies.
Only one member or shareholder is required for an OPC,
A unique feature of OPCs that separates them from other forms of the company is that the only sole member of the company needs to mention a nominee while registering the company.
No perpetual succession :
Since there's just one member in associate OPC, his death can lead to the nominee choosing or rejecting to become its sole member. This doesn't happen in other companies as they follow the conception of perpetual succession.
Minimum one director :
OPCs should have a minimum of one person (the member) as director. They can have a maximum of fifteen directors.
No minimum paid share capital :
Companies Act 2013 has not prescribed any amount as minimum paid capital for OPCs.
Special privileges :
OPCs relish many privileges and exemptions under the Companies Act that other forms of companies don't possess.
One-person company examples :
CHANDOLA AGRO INDUSTRIES (OPC) PRIVATE LIMITED, MSV TRADING ENTERPRISES (OPC) PRIVATE LIMITED, etc.
Some of the Exemptions available to OPC are :
Some of the privileges are :
Step 1: Apply for DSC
The first step is to get the Digital Signature Certificate (DSC) of the proposed Director that needs the subsequent documents:
Part B: You need to submit some required One Person Company Registration Documents to move further in the process.
Step 2 : Apply for DIN
Once the Digital Signature Certificate (DSC) is formed, the next step is to apply for the Director Identification Number (DIN) of the proposed Director in the SPICe Form, together with the name and address proof of the director. Form DIR-3 is t option only available for existing corporations. Up to three directors can be assigned DIN status in the SPICe form.
Step 3 : Name Approval Application
The next step while incorporating an OPC is to decide on the company's name. The corporate name will be within the “ABC (OPC) Private Limited style.”
Step 4 : Documents needed
Step 5 : Filing of Forms with MCA
The SPICe form, SPICe-MOA, and SPICe-AOA will be uploaded to the MCA together with all the supporting papers, including the DSCs of the Director and the professional website for approval.
Step 6 : Concern of the One Person Company Registration Certificate of Incorporation
On verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation, and then we can commence our business.
Checklist for Registering OPC
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The Companies Act 2013 provides that an individual may form an entity with only one member and director. Director and member may be one person.
Cost of Registration of an OPC:
The government has set an amount of Rs 2,000 to be applied to the nominal share capital of fewer than 10 lakhs. For each additional amount of one hundred rupees of nominal share capital that is less than 50 lakhs of capital, an added cost of Rs200 is imposed.
Eligibility Criteria for OPC Registration
A nominee has to be chosen by the promoter before incorporation. The minimum capital authorized by the regulator is Rs. 1 Lakh. An OPC cannot operate in the presence of a minor member of an OPC that achieves a turnover of more than Rs 2 crores or has a capital paid-up of over 50 lakhs.
"One Person Company" means an organization that has only one person as its member. An OPC is registered in the form of a limited private corporation with only one member, and there is no prohibition regarding invitations to the general public for subscription to the securities of the business.
Section 2(62) of the Companies Act defines a one-person company as one with just one person in its membership. In addition, the members of a corporation are simply members of its memorandum of association or shareholders. Therefore, the OPC is a corporation with just one shareholder, namely its shareholder.