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One-person company is the best enterprise for those individuals who do not like to work under others and are looking for the benefits of the private limited company. One-person company is the most recent to the type of business entities that there are. It has also gained wide popularity during the recent years. After the private limited company, it has become one of the most sought-after entity to start one business. It is an enterprise which we can say has the benefits of the both the sole proprietorship and that of private limited company.
We can say that it was created to combine the best parts of both the sole proprietorship and private limited company. Moreover, it has successfully blended their advantages into a one single entity. Furthermore, it is an enterprise for the people who believe in single handily managing the business.
One of the best enterprises when we see that under the head of small enterprises. If we see the data of all the small enterprises, we will find that even though immensely popular, it still lags behind when we come down to numbers. In the number of small enterprises being established, sole proprietorship still leads because of no cost of establishing and having the most-easy form of set-up.
But we also note that, one-person company is a major upgrade over sole proprietorship because it has numerous advantages such as limited liability, separate legal entity just like the private company. It is gaining popularity but because sole proprietorship does not need any hard and fast compliances, and has an easy set-up with literally no cost of setting-up, the one-person hence lags behind when it comes to sheer formation and establishment of the entities in the market.
We also note that there are many disadvantages of the one-person company, such as, all the load of management falls on the shoulders of a single person. This is great disadvantage because there are numerous legal compliances as compared to the sole proprietorship and hence it is quite not possible to carry out the management of the whole company while also fulfilling the legal compliances. But nevertheless, one-person gaining immense popularity.
The concept of One Person Company in India was introduced through the Companies Act 2013. Though an OPC allows an entrepreneur to operate a corporate entity with limited liability protection. One Person Company (OPC) registration can be done by a single person and it is juristic and liability of members is limited to their shares. OPC gives a single director to enjoy full control over the business. If a One Person Company cross an average turnover of over Rs. 2 Crore over three years or has a paid-up capital of over Rs.50 Lakh, it is mandatorily to be converted into a private limited company or public limited company within 6 months.
A one person company (OPC) registration is governed by the Ministry of Corporate Affairs, under Companies Act, 2013 and the Companies Incorporation Rules, 2014. Some of the unique features of an OPC company are like limited liability protection to shareholders, the ability to raise the equity funds, separate legal entity status and the perpetual existence make it one of the most recommended types of business entity for small and medium-sized businesses that are owned by families or professionally managed.
It takes 10-12 working days to complete one person company registration procedure, subject to the government processing time and the client document submission.
The life of an OPC business is not affected by the status of shareholders and even after the death of the shareholder, the One Person Company continues to exist. That is why single business owners benefit from the registration of a one person company.
OPC books & accounts audited annually, it has greater credibility among vendor, customers, employees and bakers.
One Person Company registration can be started and operated by a single promoter which provide full control over the business of a single person.
Liability of Directors of the one person company is limited to their shares. That means if the company suffers from any loss and faces financial crisis then the personal assets of shareholder / Member / Director will not be at risk of being seized by bank, creditors, and government.
Directors of the one person company should have a digital signature which will be used to file the OPC registration, ROC compliance forms, and Tax returns.
When a Digital signature is approved, and you will get an approval email from the Registrar of companies that you are now eligible to be a director of an OPC company. It takes 1-2 working days to approve DIN as per one person company registration procedure.
After DIN, Allotment we will proceed to file a Name approval application to ROC on your behalf.
After Name endorsement from the Registrar of Companies, we will record the OPC enrollment structure with every single supporting report. Enlistment centre of Companies takes 3 working days to finish the endorsement procedure of an OPC organization.
7-10 Working days
7-10 Working days
7-10 Working days
Q1. What is a one-person company?
Ans 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.Q2. How to incorporate a one-person company?
Ans There are two ways to incorporate a one-person company: 1. 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). 2. 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.
Q3. Is there any limit when the OPC is required to be converted into private or a public company?
Ans 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.
Q4. Is FDI allowed for OPC (one person) in India?
Ans No, the FDI (foreign direct investment) is not allowed in OPC.
Q5. What rate of taxes are applied on OPC (One person) company in India?
Ans 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 %
Q6. Can a Foreigner/NRI become nominee of OPC (one person) company?
Ans No. the act clearly states that, the nominee should also be an Indian resident.
Q7. Can the head of the OPC (one-person company) become the member of another private company?
Ans Yes! The act has not made any restriction for the head of a One-person company to become a member of another private company.
Q8. Can a private company be converted into an OPC (One-person Company)?
Q9. What is the process of converting private limited company into an OPC (One-person Company)?
Ans 1. Obtain NOC from members and creditors of the private limited company 2. Pass a special resolution for conversion 3. File special resolution in Form No. MGT.14 with ROC 4. File fees and application in Form No. INC.6 and supporting documents with ROC.
Q10. What if the turnover of my OPC exceeds Rs 2 crores?
Ans 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.
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