One Person Company

 

An OPC is a hybrid structure where the owner will enjoy all the benefits of a Private Limited Company which precisely means that the owner will have the access to bank loans, credits, limited liability, legal protection, etc. all in the name of an independent entity. An OPC Registration is governed by the Companies Act, 2013 and administered by MCA.

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Basic Plan Includes

• Digital Signature Token for 1
• DIN for Promoter
• AOA, MOA
• MCA fees for Incorporation
• Company Name Approval
• Incorporation Certificate
• Company PAN Card
• Company TAN/TDS Number
• Company Round Stamp
• Hard Copy of Share Certificate
• Esic
• PF Number
• PT
• Directors Round Stamp
• Bank Account Documents

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Basic Package Includes = • Digital Signature Token for 1 • DIN for Promoter • AOA, MOA • MCA fees for Incorporation • Company Name Approval • Incorporation Certificate • Company PAN Card • Company TAN/TDS Number • Company Round Stamp • Hard Copy of Share Certificate • Esic • PF Number • PT • Directors Round Stamp • Bank Account Documents

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advantages

Less Secretarial
Compliance

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There is no need for OPCs to hold an annual general meeting or board meeting. Instead, they are prescribed to maintain a minute book. It should be signed and dated by a member of the company.
It is not mandatory for OPCs to prepare a cash flow statement.

Creditable
Party

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It is very much noticeable that the banks and other financial institutions prefer to provide funding to a company rather than partnership firms or proprietary concerns.

Sole
Ownership

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An OPC is the only corporate entity which can be started and operated by a single promoter with a limited liability protection in India and ensures the perpetual existence with easy ownership transferability. Single ownership eliminates the need to take suggestion and permissions from other managing officials, and the sense of self belonging keep the owner motivated to work and find ways to help grow the business.

Seprate
Legal Entity

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There is almost no effect on the company when the ownership of the company changes.
A company enjoys the status of an artificial person who is eligible to acquire, own enjoy and alienate property in its name. The property that is owned by the company could be buildings, land, machinery, intangible assets, factory, residential property, etc. Additionally, the nominee director is prohibited to claim any ownership of the company while serving as the nominee director.

Easy
Formation

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OPCs have the least requirements for company registration which is; 1 shareholder, 1 director 1 nominee. Also, provided the shareholder and the director can be the same person.

limitations

Restricts Foreign
Investment

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Foreign companies and multinational companies who wants to incorporate their subsidiaries in India cannot invest in a One Person Company. Hence, an OPC will have to change their legal status to a private limited company to bring in investors. Foreigners and NRIs are allowed to invest in a Private Limited Company under the Automatic Approval route where 100% FDI is available in most sectors.

Restriction on
Conversion

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An OPC cannot be incorporated under Section 8 (Formation of companies with charitable objects etc) of Companies Act 2013. An OPC is also not allowed to carry out Non-Banking Financial Investment activities. This includes investing in securities of any body corporate.
An OPC can only convert into either a private or public company once the following conditions are met:
1. The OPC must have been in existence for a minimum of two years; or
2. It must have a paid-up share capital which has increased beyond Rs. 50,00,000/- (rupees fifty lakh); or
3. Its average turnover must have exceeded Rs. 2,00,00,000/- (rupees two crore).

Ownership
Limitations

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A natural person who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company. person incorporating the OPC must be a natural person implying that it cannot be formed by a juristic person or an artificial person e.g. any type of company incorporated under Companies Act 2013. This restricts the ownership of only individuals and not corporations.

No
Esops

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Since an OPC can have only one shareholder, there can be no sweat equity shares or ESOPs to incentivize employees. ESOPs can only be implemented if OPC converts into a private or public limited company. A private or public limited company can easily expand by an increase of authorized capital and further allotment of shares to even third parties.

FAQ's

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How many Directors can OPC appoint?
OPC can have one or more Directors on its board. No special mention has been made for the number of directors. As per the provisions of Sec 149 a OPC can have a maximum of 15 directors. It can, however appoint more than 15 directors after passing a special resolution.
Least requirements for OPC registration?
• At least 1 shareholder
• At least 1 director. The director and shareholder can be the same person.
• Minimum one nominee
• Shareholder/nominee need to be a resident of India
• Minimum Rs.1 lakh to be authorized share capitals.
• DSC and DIN for director
Can OPC be incorporated or converted to a Section 8 Company?
(with Charitable Objectives or erstwhile Sec 25 Company of the Companies Act, 1956)

As per Rule 3(5) of the Companies (Incorporation) Rules 2014, the answer is ‘No’.

Who can become a nominee of an OPC?
As per Rule 3(1) of the Companies (Incorporation) Rules 2014, only a natural person who is an Indian Citizen and resident in India shall be a nominee for the sole member of an OPC.
Is there any number restriction on formation of OPC by a person?
As per Rule 3(2) of the Companies (Incorporation) Rules 2014, no person shall be eligible to incorporate more than one OPC.
Who can form or incorporate an OPC?
As per Rule 3(1) of the Companies (Incorporation) Rules 2014, only a natural person who is an Indian Citizen and resident in India shall be eligible to incorporate/form an OPC.

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