(OPC) One Person Company Registration Online

One Person Company (OPC) Overview

The concept of One Person Company (OPC) was introduced under The Companies Act, 2013. OPC concept enables a Single individual to establish a company and enjoy combined advantages of both a sole proprietor and traditional Company. Prior to the implementation of Companies Act, 2013 , a single individual could not form a company. A minimum of two directors and members are necessary for incorporating Private limited company , whereas a minimum of three directors and seven members are required for public company.

As per Section 2 (62) of the Companies Act 2013, an OPC can be formed with one director and one member. Moreover the director and member can be the same person. This corporation type has very few compliances in comparison to private limited company.

Advantages of One Person Company (OPC)

1. Legal Status: The Member who incorporate d company and OPCS are having different Legal Status. The member is not personally liable for the losses of the company. His/her liability is limited to the extent of value of shares owned by him/her.
2. Easy to obtain Funds: Obtaining money is now easy. As OPC is a form of private company, it can go for fundraising through venture capitals, angel investors, incubators etc. Also Bank prefers to lend money to a private company than a sole proprietor.
3. Relaxation in Compliances : The companies Act, 2013 exempts OPC from compliance of following requirements.
• As there is only one director in One Person Company, therefore it is exempted from holding the Annual General Meeting of the company.
• OPC is not required to hold 4 board meetings like a private limited company. An OPC may hold only 2 board meetings. Every meeting must occur in either half of the year with a minimum gap of ninety days.
• Financial statement and Board’s report can be signed only by one director in case of One Person Company (OPC)
• Normally the Director and Company Secretary sign the annual returns of the company. However in case of One Person Company, the director alone can signs the documents if there is no company secretary.
• The OPC is not required to prepare Cash Flow Statement as part of its Financial Statements.
• An audit report on internal financial controls included in Financial Statements is not required to be filled in case of OPC.
• Furthermore, an OPC is exempt from the requirements outlined in Section 139(2) of the Company Act 2013, which stipulates that auditors must rotate every five years for individual auditors and every ten years for firms of auditors.
4. Easy to Incorporate : Since OPC can be incorporated with just one member and one Nominee, so it is very simple to register a One Person Company (OPC). There is no minimum paid-up capital requirement, however the minimum authorized capital to incorporate an OPC is Rs. 1 lakh. The incorporation process of OPC is relatively simple compared to other forms of companies.
5. Easy to operate and manage : Decision making Process is quick in OPC as it is managed and run by single person.
6. Perpetual Succession : The OPC has the feature of Perpetual Succession. While incorporating OPC, the single member needs to appoint a nominee. The nominee will run the company in case of death of member.

Disadvantages of OPC

Only Suitable for Small business : OPC is best suited for small businesses. OPCs have restrictions on the number of shareholders, only one person to own and manage the business. More Members or shareholders cannot be added in OPC to raise fund.

Restrictions to engage in Non-Banking Financial Investment operations (NBFC) : OPCs are restricted from engaging in certain activites. They can not engage in Non-Banking Financial Investment activities, including investing in securities of other corporate entities. Further OPCs cannot be converted to a company with charitable objects mentioned under section 8 of the Companies Act 2013.

Ownership and management in same hands: In an OPC the same person normally wears the hat of the owner and manager. When a single person is permitted to take and approve all the decision, there may be high chances of unethical practices.

Documents Required for Registration of One Person Company (OPC)

One Person Company (OPC) Registration Process

1. Check Eligibility
2. Name Approval Application
3. Apply for DSC & DIN
4. Drafting of MOA / AOA
5. Filing of Forms with MCA
6. The Issue of the certificate of Incorporation