What is one person company?
Section 62(2) of The Companies Act, 2013 provides that ‘One Person Company means a company which has only one member’. However, if an OPC exceeds a turnover of over Rs. 2 crore or has a paid-up capital above Rs. 50 lakhs, it must be turned into a private or public limited company within six months. OPC will give the businessman all benefits of a private limited company which categorically means they will have access to credits, bank loans, limited liability, legal protection for business, access to market etc all in the name of a separate legal entity.
Registration Process:
- Obtain Digital Signature Certificate (DSC):The first and the foremost step is to obtain ‘Digital Signature’
- Obtain Director Identification Numbers(DIN): Director should ensure that he has Director Identification Numbers(DIN).
- Name Approval: Thirdly, name of the company has to be decided. It should not be similar to any other company in the market and should not be of such a character so as to deceive customers
- Draft Memorandum of Understanding and Articles of Association:Fourth step is to prepare Memorandum of Association and Article of Association. They form the constitution and by-laws of the Company respectively. They are the most important documents required during registration of the Company. They are the Charter and the internal rules and regulations of the Company. It must be drafted with utmost care and with the advice of the experts
- Filling of Documents with the Registrar of Companies:An application has to be filled with the Registrar of the Company within whose jurisdiction the propose company is proposed to be situated.
- Certificate of Incorporation and Allotment of Corporate Identity Number:If the registrar of the company is satisfied that everything is complied with in regard to incorporation of company, and then he shall issue a certificate in the form of INC 11, normally within the 7 days of the receipt of the documents.
Benefits:
- Separate Legal Entity.
- Continuous Existence: OPC would pass on to the nominee director upon his death and therefore, continue to exist.
- Greater Credibility: As an OPC needs to have its books audited annually, it has greater credibility among vendors and lending institutions.
- Limited Liability: The directors’ personal property is always safe in a private limited company, no matter the debts of the business.
- No requirement to hold annual or extra ordinary general meetings.
FAQ
- What are the documents required for registration of One Person Company?
- Scanned copy of PAN Card or Passport (Foreign Nationals & NRIs)
- Scanned copy of Voter’s ID/Passport/Driver’s License
- Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
- Scanned passport-sized photograph Specimen signature (blank document with signature)
- Who can form or incorporate a OPC?
Only Indian citizen or resident of India can form or incorporate an OPC.
- Whether a person can incorporate more than one OPC?
A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.
- How many directors and member should be there to start an OPC?
As name suggests, there could not be more than one director and one shareholder to start a One Person Company.
- How much time it takes to incorporate a One Person Company?
It takes not more than 15 days to incorporate a One Person company subject to timely submission of documents by the client and government clearance.
- Is there any need of Digital Signature and Director Identification number?
Yes, Digital Signature Certificate (DSC) and Director Identification Number (DIN) is required for the proposed director of the one person company.
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