What are the Features of One Person Company?

One Person Company feature is a vast yet important criterion to consider. As per the entrepreneur, you need to understand the basic point and compliance requirements of the concept of OPC.

So here in this blog, you will find the best result for your research that justifies all your doubts and major components.

Meaning Of One Person Company

An OPC is a company with only one shareholder, as described in Section 2(62) of the Companies Act 2013. An OPC can be established by any person who is a natural-born citizen of India for any legitimate reason.

Sub Rule (1) of Rule 1 of the Companies (Incorporation) Rules, 2014, as modified, may be interpreted as follows

A One-Person Company can only be formed by a natural person who is an Indian citizen, regardless of where they now reside. Only an Indian citizen can be the company’s single member, and only an Indian citizen can be the company’s nominee.

Incorporation Of One Person Company

A few things to consider while coming up with a name for your One Person Company. It must be easy to remember, straightforward, and compliant with the Companies Act of 2013.

What makes a name for a Sole Company acceptable will be discussed today. You also need to keep a few details in mind when choosing an OPC name.

First, let’s break it down into its constituent parts:

• An assembled portion of the name for an OPC
• According to the Companies Act of 2013, the fundamental requirements for a One Person Company name are unique and acceptable.
• Make sure there isn’t already a firm or Limited Liability Partnership with a name that sounds too close to the one you’re considering (LLP)

Case In Point: 

Let’s pretend XYZ Technologies LLP already exists as a limited liability company. No company can legally operate under XYZ Technologies (OPC) Limited.

• If you give your OPC a name, you should check that the word itself doesn’t already exist. In addition, you can accomplish this using the Ministry of Corporate Affairs’ online portal (MCA). The secret is to always stand out from the competition.

What Are The Vital Components Of One Person Company?

Your OPC’s focus areas can be gleaned from its name’s “object” portion. In addition, it reveals the company’s core competency.

When settling on an OPC name, it’s important to remember that the object component should be descriptive while also being clear about the OPC’s intended function.

Aviation, construction, designs, electrical, energy, financial services, food, garments, hospital, hotel, information, interiors, manufacturing, medicine, mobile phones, motor vehicles, pharmaceuticals, plastics, power, real estate, restaurant, shipping, solar power, steel, technology, textiles, trading, and travel are all One Person Company examples of industries that commonly use.

Keep in mind that proposals for names of entities that include a subject that is too general are rejected.

No words like “XYZ (OPC) Private Limited” or “The XYZ Group (OPC) Private Limited” can be registered. The object clause must be very specific about the company’s line of work.

The terms “(OPC) Private Limited” must appear in the constitution section of all One Person Companies.

The words “Limited Liability Partnership” or “LLP” must appear in the appropriate section of the LLP’s governing documents.

A corporation’s minimum amount of authorized capital is also tied to its name.

Make sure to visit the MCA website and verify the availability of your desired company name before submitting your application.

What Are The Advantages Of One Person Company?

Upon its introduction by the Companies Act 2013, the ground-breaking concept of OPC quickly became a game-changer in Indian corporate law.

Young people who wanted to start their businesses benefited greatly since it provided them with the limited liability protection absent in the OPC structure.

People who prefer to be their boss should consider opening an OPC. While operating as a sole proprietor allows you to be your boss, it lacks the protections and benefits of a corporation, such as restricted liability, tax advantages, and credibility in the eyes of customers.

What follows is an examination of the advantages of this corporate alternative to the single proprietorship.

Characteristics of One Person Company

Some key characteristics of an OPC include the following:

They operate on a very confidential basis.

In all legal matters and conflicts, an OPC will be treated as a Private Limited Company, as stated in Section 3(1)(c) of the Companies Act. An OPC will be subject to the same laws and regulations that would normally apply to a private corporation.

Nominee

It is required that the only shareholder of the OPC appoint a nominee at the time of the One Person Company Registration who will become the shareholder of the OPC in the circumstance of the death or incapacity of the owner.

Perpetuation of the Same

After the death of the lone member of an OPC, the nominee can decline or accept the position. One-person businesses can’t choose this path.

Insufficient Paid-In Capital

No minimum paid-up capital requirement for One Person Companies is specified in the Companies Act.

Members of the Board of Directors

For an OPC to function, there must be at least one director and no more than fifteen directors. To increase the number of directors, OPC must submit a resolution.

Distinct advantages

An OPC has the privilege and immunity afforded by the Companies Act that is unavailable to private corporations. Here are some of them:

According to the Act’s Section 92, an OPC’s annual returns need only be signed by the director. There is no requirement for a secretary in a corporation.

The rules for holding executive and general body meetings are not binding for OPCs.

Significance of Approaching One Person Company Registration in India

No yearly membership meetings are required of OPCs. Decisions made by the board will follow the rules if they are recorded in a minute book and signed by all of the members present.

Cash flow statements are not required to be included in an OPC’s financial statements.

Straightforward Succession Plans

Because the nominee’s name is registered at the same time the OPC is created, the succession processes are streamlined.

Furthermore, unlike One Person Company, where lengthy legal procedures are usually required to transfer assets and liabilities following the member’s death.

The OPC’s assets and liabilities are automatically transferred to the nominee at the member’s end.

Safety From Legal Responsibility

A shareholder’s exposure in an OPC is capped to the amount he invested in the company’s share capital. As a result, only members’ assets are protected. Thus, if you want to get into business by yourself, consider the OPC option.

The company has the same legal standing as a limited liability company.

Due to the similarity between OPCs and Pvt. Ltd. firms, the latter have simpler access to superior banking and funding options. This raises OPCs’ profile and importance in their respective markets.

Compliance Is Simple

The rules for complying with an OPC are much looser. Due to this, fewer documents are needed, which saves money and time.

An OPC is a good fit if you’d rather have fewer responsibilities and don’t mind some visibility into how things are run

How To Start A Company In India With Just One Person Company?

The director’s electronic signature is required because companies can now be incorporated online. The OPC director requires a Digital Signature Certificate of Class 2 to make this happen (DSC). A professional legal service provider can manage the entire incorporation process on your behalf.

Procedure of Registration Of One Person Company

A single individual is responsible for founding OPC. Company formation requires a minimum of two directors and two members. OPC is the best structure for a person to start a business. Before the Companies Act of 2013, a single individual could not create a business.

To register an OPC, please follow these steps:

Phase 1: Register with the DSC

• The proposed director requires a Digital Signature Certificate (DSC), so you’ll need to get one first.
• Verification of Residence
• PAN card and Aadhaar card
• Picture Email Address Contact Number

Phase 2: Apply For DIN.

The Director Identification Number (DIN) of the intended Director should be applied for in the SPICe form once the Digital Signature Certificate has been granted, together with the director’s name and proof of address. Until recently, only two directors were allowed to apply for a DIN, but now up to three can use the SPICe application. A legitimate, already-in-existence business can only use this DIR-3 form. Similarly, effective January 1st, 2018, this change will eliminate the need for applicants to submit a second Form DIR-3.

Phase 3: Get Your Name Registered.

After establishing your OPC, the next step is to give your company a name. Thus, “XYZ (OPC Private Limited” shall be the company’s name from now on.

The name change must be submitted on Form SPICe+32 for approval. There is only room on the Form SPICe+32 application for one chosen name and justification. If the initial SPICe+ 32 application name is refused, you can always submit a second.

Once the MCA has approved the name, we can proceed.

Phase 4: Documents Required For One Person Company Registration In India

Documents required for submission to the ROC

The goals of the company or the enterprise into which the company will be formed are described in the Memorandum of Association (MoA).

Additionally, the company’s operations are governed by the norms and regulations outlined in the Articles of Association (AoA).

There may only be one director and one member. Hence a nominee must be chosen. If the director cannot serve as a director due to death or incapacity, the candidate will step into that role. Similarly, his signature on Form INC-3 will be collected alongside his PAN and Aadhar cards.

Documentation showing the proposed company’s registered address, proof of ownership, and a notarized copy (NOC) from the owner are all required.

Director’s Proposed Inc. 9 Declaration and DIR-2 Consent.

The expert will sign a declaration attesting to the fulfillment of all requirements.

Phase 5: Complete MCA Forms

The SPICe form, SPICe MOA, and SPICe AOA will be posted to the MCA site for approval with the DSC and professional. And when a company is formed, a Pan Number and a TAN are issued instantly. Forget about filling out two forms to get a PAN and a TAN.

Certification of Organizational Status (Step 6): Certificate of Incorporation Issuance

The Registrar of Companies will issue a Certificate of Incorporation of One Person Company that has been confirmed. Then we may officially launch our company.

Checklist for Registration of One Person Company

The maximum and minimum possible group size.

The selection of a nominee is required before incorporation.

The nominee’s approval will be requested on INC-3.

The OPC’s name must follow the rules set forth by the Companies (Incorporation Regulations) 2014.

The Director’s Minimum DSC Capital Proposed is 1 Lakh.

The OPC must provide evidence of a physical location for their registered office.

Timelines for Registration of an OPC in India

The prospective directors’ DIN and DSC can be obtained in fewer than 24 hours. If you’re forming an OPC, you can get your Certificate of Incorporation in as little as three to five days. A typical OPC incorporation takes around ten days to complete. On top of that, this section is subject to division approvals and returns.

As a Recap Now…

A company’s name is the first thing a potential client or supplier learns about the company. A memorable and searchable domain name begins with a unique and readily recalled company name.

Having read this post, we hope you understand what goes into an OPC name better. Choose a name for your company that reflects its mission by considering the advice above.

Established One Person Company example in India is a track for us to understand their financial structure to proceed with business operations.

Online XBRL offers the foremost services for OPC registration in India. Connect today to find out more about your company’s operations.