The revolutionary new concept of ‘One Person Company’ (OPC) has been introduced by the Companies Act, 2013. OPC provides a whole new bucket of opportunities for entrepreneurs who want to start their own ventures with an organized business structure. OPC will give the young businessman all benefits of a private limited company i.e. they have a separate legal entity which categorically means they will have access to credits, bank loans, investments, limited liability, and legal protection for business, access to market. One Person Company must be converted into a Private Limited Company if it crosses either of paid up share capital of more than 50 Lakhs or an annual turnover of Rs.2 crores and must file audited financial statements with the Ministry of Corporate Affairs at the end of each Financial Year like all types of Companies, forms needs to be filed at MCA within 6 months on breaching any one of above limit. Therefore, it is important for the Entrepreneur to carefully consider the features of a One Person Company prior to incorporation.
One Person 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.
♦ One Person Company
Features
One Shareholder- Only a natural person, who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company. Explanation: The term “Resident in India“ means a person who has stayed in India for a period of not less than 182 days during the immediately preceding one calendar year.
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.
Compliances – A One Person Company has to file annual returns etc. just like a normal company and would also need to get its accounts audited in the same manner.
Borrowing Capacity- A one person company cannot issue equity security, as it can only be owned by one person at all times so bringing investment is difficult.
Control- As an individual is having all shared so this helps in fast decision making and execution. Also he/she can appoint up to 15 directors in the OPC for administrative functions without diluting shares.
Limited Liability- The liability of the shareholder is limited up to unpaid subscription money in his name as OPC is a separate legal entity.
Documents Required for One Person Company Registration
Scanned copy of PAN Card or Passport (Foreign Nationals & NRIs)
Scanned copy of Voter’s ID/Passport/Driver’s License
Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
Scanned passport-sized photograph
Specimen signature (blank document with signature partners only)
Documents Required For the Registered Address
Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
Scanned copy of Notarized Rental Agreement in English
Scanned copy of No-objection Certificate from property owner
Scanned copy of Sale Deed/Property Deed in English (in case of owned property)
Note: Your registered office need not be a commercial space; it can be your residence, too.