The One Person Company concept was launched for a good refinement over a concept of sole proprietorship. A single promoter can start one person company and gains full authority over a company by restricting their liability towards their contributions to the company. That one person would be a sole shareholder and director.
Additionally, if an OPC company has an average turnover of Rs. 2 crores and over or acquires a paid-up fund of Rs. 50 lakh and over, it must be converted to the private limited company or the public limited company within 6 months.
How a person can start One Person Company?
According to section 2(62) of the Companies Act, 2013[1], One Person Company has the one person as the member who is a director. The concept of start One Person Company was introduced for the first time by the Companies Act, 2013. (OPC) One Person Company is a company in which there is only one owner but has limited liabilities who can act both as the shareholder as well as the director. One Person Company in India was introduced by the Companies Act, 2013 for supporting entrepreneurs who have their own capability of starting the new venture by allowing them to create a single person economic entity.
Read our article:Benefits of OPC (One Person Company)
Why One Person Company is more Preferable?
Features of One Person Company
- Company can start as One Person Company that requires only one person as the subscriber to form the company. Such company will be treated under the Act as the private company.
- A person, who will register as a one-person company, will not be eligible to incorporate more than one-person in a company.
- The memorandum of One Person Company must indicate the name of a person, with his prior written consent in the prescribed form. He will become a member of the OPC when the subscriber dies or is incapacitated to contract.
- The nominee to a memorandum of One Person Company must not be eligible to become a nominee for more than of one such company.
What is required to start One Person Company?
There are several things to start One Person Company, those are as follows:-
Documentation
Documentation plays the significant role in One Person Company Registration. The primary documents of promoters such as PAN, ID, and address proof are to submitted along with the utility bills like water bill, electricity bill, or telephone bill of the registered address along with the NOC from the owner of premises as proof of the registered address of the company.
Selection of Name for OPC Registration
The name of every company has to be unique and must not violate a name of any of the other company or trademark of someone else. For that purpose, a search for good name is conducted as per section 4 of the Companies Act read with rule 8 of Companies Rules. MCA has guidelines on Company Name Approval in India.
DSC for all the Promoters of One Person Company
DSC is equivalent to a physical or paper signature under Information Technology Act. For registration of the One Person Company, all the applications filed to the ROC in digital format signed by the proposed director. The filing process for the OPC Registration starts with an issue of the digital signature for a shareholder and director of a company.
Name Approval for a OPC Registration
RUN is the Name for an online application, which is to be used for making the application for seeking approval of a ROC for a name, proposed of the company. It is a web-based application, where 2 names in order of preference can be filed with the note on the significance of a Name and a business activities.
Spice Form Filing to ROC for OPC Incorporation
After an approval of name for the OPC, one requires to file the formal application for incorporation of a company in form SPICE to the ROC with appropriate documents and attachments. The documents require to be attached with Spice Form are MOA and AOA of the company, KYC documents of promoters, and registered address proof with NOC from the landlord.
The DSC (Digital Signatures) of promoters is then used to sign an application. Further it has to be attested by one practicing Chartered Accountant, Cost Accountant, Company Secretary, or an Advocate practicing at High Court. The government filing fee of a Company Registration depends on the proposed capital of the company.
Registering of the OPC Company with ROC
The final stage for OPC registration is to issue of Incorporation Certificate for the One Person Company after verifying the application for OPC Registration is filed in Spice Form. The issue of a registration certificate for OPC is the conclusive proof of a registration of a Company by ROC.
PAN and TAN Number for the OPC
The issue of PAN Number and TAN is done at a time of incorporation of a Company. There must no need to make any separate application. The PAN and TAN get printed on the certificate of incorporation itself, and after the Company registration, E-Pan and Tan letter is sent via email.
Conclusion
The concept of One Person Company is basically to eradicate the limitation present in the concept of sole proprietorship, which is the most popular form for small businesses in India. The liability of owner in the OPC is limited to the invested capital in this form. Are you really interested in starting a one person company then you are on the right page? We at CorpBiz are ready to help in all ways regarding One Person Company Registration. Feel free to ask us about Company registration. We are ready to serve you best.
Read our article:Know all the Documents Required for OPC Registration
