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What is One Person Company Registration ?

One-person company registration is an idea launched by the Companies Act, 2013, promoting small businesses and people who can become great entrepreneurs. With the help of this Act, a single person can build their company. It is effortless to register for a one-person company as it does not involve having partners. This type of company encourages people to start a business. The turnover for an OPC is not more than Rs. 2 Crores. In OPC, the nominee must be a resident of India.

Why should a person choose OPC?

  • There are many reasons why a person should choose OPC.
  • The paperwork required is very little.
  • The company is not affected because of the death of a person.
  • There cannot be more than one shareholder, but it can have more than one owner.
  • A person cannot consolidate more than one OPC.
  • No multiple concessions are required.
  • No third-party involvement.
  • Restriction of liabilities to its members.

OPC Registration Package Includes

  • DIN for 1 Directors
  • Digital Signature For 1 Director
  • ROC Fees & Pan card
  • Name search & approval
  • Free Accounting Software & GST filing

What is the eligibility criteria of OPC registration?

  • The person should be a citizen and a resident of India.
  • Legal entities such as LLP or companies cannot join the OPC.
  • There is a requirement of at least Rs 1 lakh as the authorised capital.
  • There should be at least one shareholder or director
  • A minor cannot be a member of the OPC.
  • In an OPC, if the turnover is more than Rs 2 Crores, it should be converted into a public or private company within 6 months.

What are the concerns related to OPC registration?

  • Minimum authorised share capital Of Rs. 100000.
  • There can be only one shareholder.
  • It has separate legal entities.
  • There should not be any minor as a member.
  • It is mandatory to appoint one nominee.
  • An OPC cannot invite people to subscribe to any securities of the company.
  • There should be a legal identity given to the company.
  • The shares of the company cannot be transferred.
  • The taxes of an OPC are the same as a private limited company.
  • An OPC must be registered under the registrar of companies.

What are the advantages of choosing an OPC?

Limited liability – It means that the company and the director are two different things. If the company is closed and has to pay its debts, then the owner’s personal property is safe. The debts need to be paid using the assets of the company only.

Greater credibility – It is essential that the books are audited yearly in the OPC. So this gives higher credibility between the seller and the institution that is lending.

Continuous existence – OPC continues ever after the death of the director. It has separate legal entities. The nominee director will handle the company.

Easy to sell an OPC – It is very easy to sell this type of company as it has very little documentation.

The company’s control is under a single owner – As there is a single owner, it benefits in making a fast decision, and there is quick execution of work.

What are the steps for an OPC registration?

Application of DPIN and DSC – The director has to apply for DPIN and digital signature. The director can skip this step if they already have them.

Name approval – The director has to provide three names for his company that should be ideal for business. The MCA will select one from the available options.

AOA and MOA submission – After the approval of the name, the director needs to draft an article of association and memorandum of association, filed by MCA and signed by the director in the presence of a member.

Getting the incorporation certificate – After 15 to 25 days, the director gets the incorporation certificate that proves that the company is created.

What are the taxation rules of an OPC company?

  • The company should file an income tax return necessarily.
  • If the company has employees, then TDS is obligatory to be paid all the quarter.
  • If an OPC has more than 10 employees, then there should be ESI registration required to be done by law.
  • For the OPC, valid certificates are required for enrolling for service tax returns and VAT.
  • Holding board meetings and annual general meetings.
  • Chairman for the meeting.

What are the exemptions for the OPC?

  • Proxies.
  • Postal ballot.
  • Demand of poll.
  • Vote by showing hands.
  • Voting rights restriction.
  • Signature on annual returns.
  • Signature on financial statements.
  • Notice for the meeting.
  • Quorum of meeting.

What are the mandatory annual compliances of the OPC?

  • There should be at least two board meetings annually.
  • There should be a statutory audit done by a CA.
  • ITR filings.
  • Auditor’s appointment. Filings to the ROC (registrar of companies).
  • Maintaining minutes. AOC-4 for financial statements.
  • Annual return of the MGT-7.

What are the factors that need to be considered for the selection of a name for an OPC?

  • It should be short and simple.
  • It should be meaningful.
  • It should be unique.
  • It should not end with limited or private limited.
  • It should not be offensive or illegal.
  • It should not violate any law.

What is the difference between an OPC company and a private company?

Eligibility – In an OPC, only one individual is eligible to incorporate a citizen and a resident of India. In contrast, in a private company, any individual can form the company.

Minimum requirement – In OPC, there should be 1 member and 1 director, but in a private company, there should be 2 members and 2 directors required.

Credibility – In an OPC, there is medium credibility, whereas there is high credibility in a private company.

Time taken for registration – A private company takes less time, i.e., 10-15 days, than an OPC, i.e., 15-20 days.

Conversion system – An OPC cannot be converted before two years, whereas a private company can be converted to an LLP.

Foreign investment – In the OPC, foreign investment is not allowed, whereas it is allowed in a private company.

Fundraising options – An OPC is low, as it is high in a private company.