ONE PERSON COMPANY
One Person Company (OPC) is a type of company which consist of just an individual with the intention of engaging into commercial business. As defined u/s 2(62) of the Companies Act, 2013, “One Person Company” is a company which has only 1 person as member. Prior to implementation of the Companies Act, 2013, minimum 2 members were required to form a company. OPC consists of only 1 member and 1 director and they may both be the same individual.
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NATURE OF OPC REGISTRATION:
One Person Company (OPC) is a type of company which consist of just an individual with the intention of engaging into commercial business. As defined u/s 2(62) of the Companies Act, 2013, “One Person Company” is a company which has only 1 person as member. Prior to implementation of the Companies Act, 2013, minimum 2 members were required to form a company. OPC consists of only 1 member and 1 director and they may both be the same individual.
An OPC can be incorporated by an individual who is a natural person except a minor and a resident of India or NRI.
The Companies Act, 2013 provides that an individual can form a company with one single member and one director. The director and member can be the same person. Thus, one person company means one individual who may be a resident or NRI can incorporate his/her business that has the features of a company and the benefits of a sole proprietorship.
ADVANTAGE OF OPC
- Legal status- The OPC receives a separate legal entity status from the member. The separate legal entity of the OPC gives protection to the single individual who has incorporated it. Thus, the creditors can sue the OPC and not the member or director.2
- Easy to obtain funds- Since OPC is a private company, it is easy to go for fundraising through venture capitals, angel investors, incubators etc Thus, it becomes easy to obtain funds.
- Less compliances-The Companies Act, 2013 provides certain exemptions to the OPC with relation to compliances. The OPC need not prepare the cash flow statement. The company secretary need not sign the books of accounts and annual returns and be signed only by the director.
- Easy incorporation– It is easy to incorporate OPC as only one member and one nominee is required for its incorporation. The member can be the director also. The minimum authorised capital for incorporating OPC is Rs.1 lakh but there is no minimum paid-up capital requirement. Thus, it is easy to incorporate as compared to the other forms of company.
- Easy to manage-Since a single person can establish and run the OPC, it becomes easy to manage its affairs. It is easy to make decisions, and the decision-making process is quick
- Perpetual succession- The OPC has the feature of perpetual succession even when there is only one member. While incorporating the OPC, the single-member needs to appoint a nominee. Upon the member’s death, the nominee will run the company in the member’s place.
- Easy to obtain funds- Since OPC is a private company, it is easy to go for fundraising through venture capitals, angel investors, incubators etc Thus, it becomes easy to obtain funds.
- Less compliances-The Companies Act, 2013 provides certain exemptions to the OPC with relation to compliances. The OPC need not prepare the cash flow statement. The company secretary need not sign the books of accounts and annual returns and be signed only by the director.
- Easy incorporation- It is easy to incorporate OPC as only one member and one nominee is required for its incorporation. The member can be the director also. The minimum authorised capital for incorporating OPC is Rs.1 lakh but there is no minimum paid-up capital requirement. Thus, it is easy to incorporate as compared to the other forms of company.
- Easy to manage-Since a single person can establish and run the OPC, it becomes easy to manage its affairs. It is easy to make decisions, and the decision-making process is quick
- Perpetual succession- The OPC has the feature of perpetual succession even when there is only one member. While incorporating the OPC, the single-member needs to appoint a nominee. Upon the member’s death, the nominee will run the company in the member’s place.
DOCUMENTS FOR OPC REGISTRATION
Following documents required for registration of OPC:
- Proof of Identity (PAN, Aadhaar card, Voter’s card)
- Self-attested address Proof of Director/ Member
- Proof of Registered Office (Electricty bill/ Bank Statement)
- Passport size photograph
- DIN and DSC of the director
- The Memorandum of Association (MoA) which are the objects to be followed by the Company or stating the business for which the company is going to be incorporated.
- The Articles of the Association (AoA) lays down the by-laws on which the company will operate.
TIMELINES OF OPC REGISTRATION
The DSC and DIN of the proposed directors can be obtained in 1 day. The Certificate of Incorporation of an OPC is obtained in 3-5 days. The whole incorporation process of an OPC takes approximately 10 days, subject to departmental approval and revert from the respective department.
