One Person Company (OPC) Pvt Ltd.

The Companies Act of 2013 introduced a novel concept known as the One Person Company (OPC). As the name implies, an OPC is a company established by a solitary individual. This individual both establishes and manages the company. An OPC encompasses all the attributes of a company, including uninterrupted continuation, confined liability, and an autonomous legal identity.

Enquiry Now

    Before the implementation of the Companies Act of 2013, a lone individual was unable to create a company. If someone desired to initiate their business, they were limited to a sole proprietorship, as the establishment of a company necessitated a minimum of two directors and two members.

    In the context of a Private Company, a minimum of 2 Directors and 2 Members was obligatory, whereas a Public Company mandated a minimum of 3 Directors and 7 members. Previously, an individual couldn’t establish a Company on their own.

    As outlined in Section 2(62) of the Company’s Act 2013, a company can now be formed with just 1 Director and 1 member. This Director and member are permitted to be the same individual. This variant of a company entails fewer compliance requisites compared to a private company.

    One Person Company Incorporation

    Under the provisions of the Companies Act 2013 in India, it is possible to secureOne Person Company registration with the participation of only one member and one Director. It is permissible for the Director and the member to be the identical individual. This avenue allows an individual, whether they are a resident or a Non-resident Indian, to undertake an One person registrationin India.

    When initiating the One person company registration online, the primary stage involves acquiring approval for the business name from the Ministry of Corporate Affairs (MCA). This step generally spans a timeframe of approximately 24 to 48 hours. In the context of a private limited company in India, the name’s conclusion should incorporate the term “private limited.” Meanwhile, the nomenclature for a One Person Company concludes with “(OPC) private limited,” Limited Liability Partnerships (LLPs) conclude with “LLP,” and Section 8 companies have the option to conclude with terms like “foundation,” “association,” or “institution.”

    It’s imperative that a proposed one person company registration name does not bear resemblance to an existing company’s name, either identically or in a similar manner. Furthermore, eachcompany name must encompass a term signifying the type of activity it engages in.

    One Person Company Registration Required Documents

    Required Documents

    Preparation of the subsequent documents is essential for submission to the ROC:

    Memorandum of Association (MoA) , outlining the Company’s objectives or the nature of business it will undertake.
    Articles of Association (AoA), outlining the operational by-laws of the Company.
    Given the singular presence of 1 Director and 1 member , appointment of a nominee becomes essential. The nominee assumes responsibility in case of the Director’s incapacitation or demise. Consent in Form INC – 3, PAN card, and Aadhar Card are prerequisites for the nominee.
    Evidence of the Company’s registered office , ownership proof, and a NOC from the owner.
    Declaration and Consent through Form INC -9 and DIR – 2 respectively, provided by the proposed Director.
    Certification by a professional confirming compliance fulfilment.

    Eligibility for OPCIncorporation.

    Requirement for a minimum and maximum of a single member.
    Prior appointment of a nominee is essential.
    Procurement of nominee’s consent through Form INC-3 is necessary.
    OPC name selection must adhere to the stipulations in the Companies (Incorporation Rules) of 2014.
    Minimum authorized capital of Rs. 1 lakh.
    Digital Signature Certificate (DSC) of the intended director.
    Substantiation of the OPC’s registered office.

    Benefits of One Person Company in India

    Distinct Legal Identity

    One person company in India enjoys its own legal identity, separate from its member. This legal segregation safeguards the individual who established the OPC. The member’s liability is restricted to their shareholdings, insulating them from personal accountability for the company’s losses. Consequently, creditors can solely pursue claims against the OPC, not the member or director.

    Simplified Fundraising

    As One person company in India holds the status of a private company, accessing funds via avenues like venture capital, angel investors, and incubators is streamlined. Banks and financial institutions are more inclined to extend loans to companies rather than proprietorships. This, in turn, facilitates smoother access to funds.

    Reduced Compliance Burden

    The Companies Act of 2013 confers certain exemptions upon OPCs in terms of compliance requirements. One person company in India is exempted from generating cash flow statements. The responsibility of signing the books of accounts and annual returns lies solely with the director, eliminating the need for the company secretary’s signature.

    Effortless Incorporation

    Incorporating One person company in India is straightforward, mandating only one member and a single nominee. The member can also assume the role of the director. While the minimum authorized capital stands at Rs. 1 lakh, there is no obligatory minimum paid-up capital. In comparison to other corporate structures, One person company registration in Delhi (India) is notably uncomplicated.

    Drawbacks of One Person Companyin India

    Limited Suitability for Small Businesses

    OPC is made for small-scale business structures. The OPC registration is perpetually limited to having just one member. This implies that there’s no room for augmenting capital by introducing additional members or shareholders. Consequently, as the business expands and flourishes, the incorporation of more members is unfeasible.

    Constraints on Business Activities

    One person company in India is prohibited from engaging in Non-Banking Financial Investment activities, including the investment in securities of other corporate entities. Moreover, it cannot transform into a company with charitable objectives as delineated in Section 8 of the Companies Act, 2013.

    Conflation of Ownership and Management

    Given that the sole member can simultaneously serve as the company’s director, a distinct demarcation between ownership and management becomes blurred. The solitary member retains the capacity to make and authorize all decisions. This intermingling of ownership and control may pave the way for unethical business practices.

    Transform your business dreams into reality with Sadique and Ameen Associates. Discover the ease of one person company registration online in India. Our experts will guide you through the process, ensuring a smooth journey to establish your own company. Take the first step towards your entrepreneurial goals with us today!