One-Person company |how to apply| India 2020?
The Companies Act 2013 introduced this new concept of one person company registration. Such kind of entity is suitable for one person and single owners. One person company is the best option for those who do not like to work under other and want complete control over the complete. After limited company, it has become the most sought-after entity to start one-person company.
The One person company registration provides the benefits of both private limited and limited liability company. It provides various advantages such as limited liability, separate legal entity just like the private limited company. If we count the number of small enterprises being set up, one proprietorship still leads because it has no cost of establishing and also has a flexible procedure to register.
Procedure of One Person Company registration
- Step 1. Digital Signature Certificate: For one person company registration director of the firm should have a digital signature. The digital signature should be used by the file the registration, ROC compliance forms and the tax returns of the company.
- Step 2. Director Identification number: DIN is an 8 digit unique Director identification number allotted by the Central Government to any person intending to be a Director or an existing director of a company. DIN has a lifetime validity.
- Step 3. Name reservation: One of the important step is to reserve a unique name for the company. It provides your company with unique identification and make it legal entity.
- Step 4. Issuance of Incorporation certificate
For One person company registration only single promoter and one director is required. It is the best option for those who want a complete authority and control over their business. According to the section 2(62) of the companies act 2013, one person and director is required to register one person company. In this type of company registration compliance filind is also limited.
One Person company is a registered separate legal entity under The Companies Act 2013 by the government of India. A One person company is a legal entity and juristic person for the law.
It has perpetual existence, the one person company will keep on existing in law even after the death of shareholders/ directors or company becomes bankrupt/ insolvent.
The ownership of one person company can easily be transferred by transferring the shares of the company.
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Documents required for One Person Company registration
- PAN Card
- ID Proof
- Scanned passport size photo of the director
- Bank statement of the director
- Rent Agreement/ NOC if property is one rent
- Registered office proof
What is a one-person company?
A one-person company is a form of company where there is a single person who acts as the director of the company. It gives the concerned person full control over the operations of the company. It is the best form because of business for the people who want full control of the business. Because there is limited liability and also there on minimum authorized capital requirement.
How to incorporate a one-person company?
There are two ways to incorporate a one-person company:
- Incorporation through SPICe (Without filling RUN): The persons who want to register a one-person company or the stakeholders have the benefit of 5 (five) different services like, DIN, Incorporation of new company, allotment of PAN and TAN in one form by applying for incorporation of a new company through SPICe form (INC-32).
- Incorporation through SPICe (With RUN) The RUN (Reserve Unique Name) service is used for name availability. After name approval, form SPICe shall be filed for incorporation of the OPC within 20 days from the data of approval of RUN. The company shall be file form INC-22 within 30 days once form SPICe is registered in case the address of correspondence and registered address is not the same.
Is there any limit when the OPC is required to be converted into private or a public company?
YES! In case the paid-up share capital of an OPC (One Person Company) exceeds fifty lakhs rupee or if the annual turnover of immediately preceding three consecutive financial years exceeds two crore rupees, then the OPC has to mandatorily convert itself into private or public company.
Is FDI allowed for OPC (one person) in India?
No, the FDI (foreign direct investment) is not allowed in OPC.
What rate of taxes are applied on OPC (One person) company in India?
Corporate Income-tax- 30 % of the total income Surcharge- 5 % of such income, if it exceeds INR one crore Education Cess- 3 % of the total of Income-Tax and surcharge Dividend Distribution Tax (DDT)- 15 %
Can a Foreigner/NRI become nominee of OPC (one person) company?
No. the act clearly states that, the nominee should also be an Indian resident.
Can the head of the OPC (one-person company) become the member of another private company?
Yes! The act has not made any restriction for the head of a One-person company to become a member of another private company.
Can a private company be converted into an OPC (One-person Company)?
Yes, a private company can be converted into an OPC (One-person Company). The conditions are following:
- The paid-up capital shall not exceed Rs. 50 lakhs
- Average annual turnover of the private company for three years should not exceed Rs 2 crore.
What is the process of converting private limited company into an OPC (One-person Company)?
- Obtain NOC from members and creditors of the private limited company
- Pass a special resolution for conversion
- File special resolution in Form No. MGT.14 with ROC
- File fees and application in Form No. INC.6 and supporting documents with ROC.
What if the turnover of my OPC exceeds Rs 2 crores?
If the turnover of an OPC (One-person company) exceeds Rs. 2 crores, the OPC (One-person company) must get converted into a private limited company.