One Person Company Incorporation

Concept of One Person Company

In India, in the year 2005, the JJ Irani Expert Committee recommended the formation of OPC. The concept of One Person Company (OPC) has now been introduced in India, through Section 2 (62) of Companies Act, 2013 thereby enabling Entrepreneur(s) carrying on the business in the Sole Proprietor form of business to enter into a Corporate Framework. Though this concept is new in India but it is already a part of many other countries like China, Australia, Pakistan and UK etc. According to Section 2 (62) of the Companies Act, 2013 ‘One Person Company’ means a company which has only one person as a member. By virture of section 3(2), a company formed under one person company may be either:

1. a) A company limited by shares, or
2. b) Company limited by guarantee, or
3. c) An unlimited company.

One Person Company is a hybrid of Sole-Proprietor and Company form of business, and has been provided with concessional/relaxed requirements under the Act.

Difference between a Sole Proprietorship and an OPC

The fundamental difference between a sole proprietorship and an OPC is the way liability is treated in the latter.

A one-person company is different from a sole proprietorship because it is a separate legal entity that distinguishes between the promoter and the company.

The promoter’s liability is limited in an OPC in the event of a default or legal issues. On the other hand, in sole proprietorships, the liability is not restricted and extends to the individual and his or her entire assets.

Features of One Person Company (OPC)

1. a) Only One Shareholder: Only a natural person, who is an Indian citizen and resident in India, shall be eligible to incorporate a One Person Company.

1. b) Nominee for the Shareholder: The Shareholder shall nominate another person who shall become the shareholders in case of death/incapacity of the original shareholder. Such nominee shall give his/her consent and such consent for being appointed as the Nominee for the sole Shareholder. Only a natural person, who is an Indian citizen and resident in India, shall be a nominee for the sole member of a One Person Company.

1. c) Director: Must have a minimum of One Director, the Sole Shareholder can himself be the Sole Director. The Company may have a maximum number of 15 directors.

Privileges of a One Person Company

1. The financial statement, with respect to One Person Company, may not include the cash flow statement;
2. Financial assistance can be taken by the member from the OPC for purchase of or subscribing to its own shares
3. Need not hold annual general meeting
4. Need not prepare a report on Annual General Meeting
5. Financial statement and Board’s report can be signed only by one director
6. One person company need not to have more than one director on its Board.
7. Need not to appoint Independent directors on its Board
8. Retirement by rotation is not applicable.
9. The provisions relating to contract of employment with managing or whole-time directors does not apply to a One Person Company

Benefits of One Person Company

The concept of One Person Company is quite revolutionary. It gives the individual entrepreneurs all the benefits of a company, which means they will get credit, bank loans, access to market, limited liability, and legal protection available to companies.

Prior to the new Companies Act, 2013 coming into effect, at least two shareholders were required to start a company. But now the concept of One Person Company would provide tremendous opportunities for small businessmen and traders, including those working in areas like handloom, handicrafts and pottery. Earlier they were working as artisans and weavers on their own, so they did not have a legal entity of a company. But now the OPC would help them do business as an enterprise and give them an opportunity to start their own ventures with a formal business structure,

Further, the amount of compliance by a one person company is much lesser in terms of filing returns, balance sheets, audit etc. Also, rather than the middlemen usurping profits, the one person company will have direct access to the market and the wholesale retailers. The new concept would also boost the confidence of small entrepreneurs.

Procedure to register One Person Company

Once a name for the company is decided, the following steps have to be taken by the Registration Bazar:

Step 1: Application file for DSC of Directors (Digital Signature Certificate)

Step 2: File Spice Part A for the name availability

Step 3: After name approval Registration Bazar will be prepare the various form for company Registration.

Step 5: After approval of the company registration form Certificate of incorporation will be issued by ROC with PAN and TAN

Documents for incorporation of One Person Company

To proceed for Company Registration Registration Bazar need some documents-

1. Photo of director and nominee.
2. PAN card of director and nominee.
3. Any one ID proof for director and nominee address

Aadhar Card

Voter ID

Passport

Driving License

1. Any one address proof for director and nominee address.

Bank statement having latest 30 days entry

Bank Passbook with entries page having latest 30 days entry

Electricity Bill in name of director and nominee

Airtel / Vodafone / Idea / MTNL / BSNL bill in name of director and nominee

1. Any one bill in anybody name for registered office address

Latest Electricity Bill

Latest Mobile Bill – Airtel / Vodafone / Idea / MTNL / BSNL bill

Documents Provided by Registartion Bazar after One person company Registration.

1. Certificate of incorporation
2. PAN Card of Company
3. TAN Card of Company
4. ESI Registration
5. PF Registration
6. Memorandum of Association of the company
7. Article Of Association of the company
8. Digital Signature Certificate of director
9. Director Identification Number (DIN) of Director

Why Choose Registartion Bazar

Registration bazaar is India’s largest Registration services provider for new entrepreneur at lowest price. We understand that new entrepreneur faces many problems at the initial stage. Now registration bazar provides registration of One Person Company at lowest price at a single click. We have an expert team of Professional like. Chartered accountant, company secretary, Cost accountant, Advocate. We provide all the services Such as Companies/ LLP’s Registration, Roc Compliances, SEBI Compliances, RBI Compliances, FEMA Compliances, GST, Income Tax, PF, ESI, MSME Registration, and all type of financial and financial Advisory services, etc. under a single roof.