Is It Good To Start One Person Company In India?

One Person Company in India is a new concept introduced in the Companies Act 2013. Before the Companies Act 2013 came into force an individual could not form a company. An OPC has the characteristics of a company and the advantages of a sole proprietorship. Earlier if a person wanted to set up a business, he or she should only opt for a sole proprietorship.

Under Section 2 (62) of the Companies Act 2013, a company can have only 1 director and 1 member. One person company registration in India is a type of entity where there are fewer compliance requirements compared to a private limited company.

Benefits of One Person Company in India

An OPC is a company that can be formed with one director and one member. It provides better opportunities with minimum compliance.

Easy Incorporation

In one person company, a single person can start their own business with very little compliance. For incorporation of OPC, only one member and one nominee are required.  There is no need for paid-up capital is required for its incorporation.

Total control of the person

Since it is a single-person company, the entire control rests in the hands of only one person. Since there are no conflicting opinions, decision-making becomes easier and faster, thus making it easier to run and manage the company. One Person Company in India is incorporated by one person.

Easy compliance and tax flexibility

Companies Act, 2013 A people provide limited or reduced compliance to a company. Less compliance means less paper, and less compliance takes less time. OPC does not need to show cash flow and also benefits from tax availability. Only directors have to file books of accounts and annual returns.

Benefits for small businesses

A one-person company benefits small businesses with easy funding, less compliance, loans at lower interest rates, etc.

One Person Company Under the Companies Act, 2013

Section 2(62) of the Companies Act 2013 defines a one-person company which is having only one person as its member. Moreover, the members of a company are nothing but its memorandum of association or its shareholders.

So, an OPC is effectively a company with only one shareholder as its member. One Person Company in India is usually formed when there is only one founder/promoter for the business.

Entrepreneurs whose businesses are in the early stages prefer to form OPCs instead of sole proprietorships due to the many advantages that OPCs offer. For getting more information you can download the one person company pdf and also get the information on google as one person company Wikipedia.

Characteristics of A One Person Company

Here is one person some characteristics of a one person company,

• Private Company: Section 3(1)(c) of the Companies Act states that a single person may form a company for any lawful purpose. One person company is a private company with only one member.
• Single-member: OPC has only one member or shareholder.
• Nominee: The distinguishing feature of OPC from other types of companies is that the sole member of the company has to mention the nominee while registering the company.
• No Perpetual Succession: Since there is only one member in One Person Company in India, the nominee will elect or decline to become its sole member on his death. This is not the case with other companies as they follow the concept of perpetual succession.
• At least one director: OPCs must have at least one person (member) as a director but it can have a maximum of 15 directors.
• No Minimum Paid-up Share Capital: The Companies Act, 2013 does not prescribe any amount as minimum paid-up capital for OPCs.
• Special Privileges: OPCs enjoy many privileges and exemptions under the Companies Act which are not available to other types of companies.

Creation Of One Person Companies

A single person can form a one person company by naming his name in the memorandum of association and fulfilling other requirements prescribed in Companies Act, 2013.

Such a memorandum must mention the details of the nominee who will become the sole member of the company in case of the death of the original member is unable to enter into a contract.

This memorandum and the nominee's consent to his nomination should be filed with the Registrar of Companies along with the application for registration.

The nominee may withdraw his name at any time by submitting the necessary application to the Registrar. His nomination may be later revoked by the member. All the details explain one person company in company law.

While registering for one person company in India it is necessary to register for the company’s trademark also. Legaldocs trademark class, Use this trademark class finder tool to find the right trademark class for your goods and services from over 8000 different goods and services.

OPC Company Registration Process

There is a procedure to register a company. You can find out the center of company registration near me on google also for registration.

Step 1: Apply for DSC

The first step is to obtain a Digital Signature Certificate (DSC) of the proposed director which requires the following documents:

ü Address proof

ü Aadhar card

ü PAN card

ü Photo

ü Email Id

ü Phone number

Step 2: Apply for DIN

Once the Digital Signature Certificate (DSC) is generated, the next step is to apply for the Director Identification Number (DIN) of the proposed director in the SPICe form along with the director's name and address proof. Form DIR-3 option is available only for existing companies. This means from January 2018, the applicant need not fill Form DIR-3 separately. Now one can apply for DIN three directors in SPICe form.

Step 3: Name Approval Application

The next step when incorporating a One person company in India is to decide OPC company name. The name of the company will be in the form Private Limited.

Name form SPICe+ 32 can be approved in the application. Only one preferred name can be given in the Form SPICe+ 32 application with the importance of keeping that name. If the name is rejected, another name can be submitted by applying SPICe+ 32 form. Once the name is approved by the MCA, we will proceed to the next step.

Step 4: Required Documents

We have to prepare the following documents to register a One person company in India submitted to the ROC. 

·        Memorandum of Association (MOA) stating the business to be followed by the company or the business for which the company is to be incorporated.

·        The Articles of Association (AoA) lays down the bylaws by which the company will operate.

·        Since there is only 1 director and one member, a nominee has to be appointed on behalf of a such person because if he becomes incapacitated or dies, and If unable to perform his duties, the nominee will act on behalf of the director and take his place. His consent in Form INC – 3 will be taken along with his PAN Card and Aadhaar Card proof of registered office of the proposed company and Proof of ownership and NOC from that owner.

·        Declaration and Consent of Proposed Directors in Forms INC -9 and DIR - 2 respectively.

·        Professional's declaration certifying that all compliances have been met.

Step 5: Form filling with MCA

All these documents will be attached with the SPICe form, SPICe-MOA, and SPICe-AOA along with the DSC of Directors and Professionals, and uploaded on the MCA site for approval. PAN number and TAN have been generated automatically at the time of incorporation of the One person company in India. There is no need to fill out a separate application for obtaining a PAN number and TAN.

Step 6: Issuance of Certificate of Incorporation

After verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and we can start our business. Find out the center of OPC registration near me on google and register your OPC.

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