The 2013 Companies Act allows the registration of a ‘ One Person Company’ in addition to founding a public or private limited corporation (OPC). A firm with only one member is referred to as an OPC. Let’s look at the relevant legal provisions under this Act.
Introduction:
The Companies Act, of 2013, fundamentally transformed Indian corporate law by incorporating numerous previously unknown ideas. The emergence of the one-person company idea was one such paradigm shift. This resulted in the recognition of a whole new means of creating enterprises that provided the freedom that only a company form of entity can provide, while simultaneously offering the security of limited liability that partnership and sole proprietorships could not.
At Vakilsearch we help you submit the approval application for your proprietorship. Our experts help in drafting the necessary paperwork on your behalf and also assist in the allocation of PAN and TAN for your business. The progress is strictly monitored and reported in a timely fashion. Follow Vakilsearch for more on The One Person Company Act, 2013, and how to register your business for the same.
OPC: One-Person Company
A one-person company, or OPC, is a private corporation that is formed with only one person as a member. Furthermore, a company’s members are nothing more than contributors to its association memorandum or stockholders. As a result, an OPC is practically a firm with only one stakeholder as a member. Such businesses are typically formed when there is only one founder/promoter. Entrepreneurs in the early phases of their enterprises choose to establish OPCs rather than sole proprietorships due to the numerous benefits that OPCs provide.
The concept is intended to foster entrepreneurial and business commercialisation.m Such a firm can be restricted by share or guarantee, or it might be limitless. If shares limit the corporation, it must meet the following standards.
- A minimum paid-up capital of Rs. 100,000 is required
- The transferability of shares is restricted
- It is illegal to invite the general public to subscribe to the company’s shares.
Did You Know: Lok Sabha passed a bill for the 2013 COMPANIES ACT On December 18, 2012. On August 8, 2013, the Rajya Sabha passed a bill. The Ascension of the President was received on August 29th, 2013. The statute comprises 470 clauses and 7 schedules, compared to the previous Companies Act, 1956, which has 658 sections and 15 schedules. The act has been broken down into 29 chapters.
Features of OPC
Here are some general characteristics of a one-person business:
Private company: According to Section 3(1)(c) of the Companies Act, a single individual can establish a company for any legitimate purpose. It goes on to characterise OPCs as private corporations.
- Legal Identification: It should have a distinct name that serves as its legal identifier. Furthermore, all company activity should be conducted under that name
- Member: OPCs, unlike other private corporations, can only have one member or shareholder
- Minimum of one director: OPCs must have at least one director (the member). They can have up to 15 directors
- Restriction: The individual who establishes a one-person business is not entitled to establish several one-person firms. This implies that the individual is only legally allowed to start one OPC
- Nominee: One distinguishing feature of OPCs from other types of corporations is that the lone member of the firm must name a nominee when registering the company.
- Nominee’s Name Change: The OPC member may modify the nominee’s name at any time. He or she must provide notice to the company, and the firm must provide it to the Registrar of Companies (RoC)
- No Succession: As an OPC has only one member, his death results in the nominee selecting or declining to become its single member. This does not happen in other firms since they adhere to the principle of everlasting succession
- Memorandum: The OPC memorandum must expressly identify the name of a person (nominee) with a documented confirmation in the prescribed format who will continue as a participant in the event of the subscriber’s death or incapacity
- Extension: The word ‘one person company’ must appear just below the firm’s name in all locations where the company’s name is used
- Conversion: The owner cannot transform OPC into a corporation that focuses on the advancement of trade, art, leisure, teaching, environmental protection, public assistance, and so on. Furthermore, in some circumstances, it may be converted into a private or public business
- No minimum paid-up share capital: The Companies Act of 2013 does not specify a minimum paid-up capital for OPCs
- Special features: Under the Businesses Act, OPCs have many advantages and exemptions that other types of companies do not have. Some of them are
- OPC is not required to produce a cash flow statement
- If OPC does not have a secretary, the director may sign the annual report
- There is no legal requirement to conduct an Annual General Meeting.
Documents Required for OPC Registration
The following list of documents is essential for OPC company registration
- PAN card of the owner and the nominee
- Aadhar card of the owner and the nominee
- Passport size photo (one) each of the owner and the nominee
- Email Id
- Contact number
- Bank statement/ telephone bill/electricity bill (last two months)
- Notarised rent agreement
- No Objection certificate from the property owner
- In the case of owned property, a sales deed
Vakilsearch is an online platform that assists you in all steps of registering your business as an OPC company. You can reach out to our Legal experts for all the guidance and help required. Also, all your queries are resolved in a timely and satisfactory manner. The team at Vakilsearch helps in fulfilling all formalities and legal aspects of an OPC.
Benefits of OPC
The benefits of the OPC include
- Limited liability protection for directors and shareholders
- Complete control of the solitary proprietor of the firm
- Tax savings and flexibility
- Less formal legalities
- Credit from banks and other organisations is easily accessible.
Learn more about the advantages of the One-Person Company at the official website of Vakilsearch.
Conclusion
The most prevalent kind of legal entity for micro-businesses or startups in the early stages is the OPC. Its inception, management, and operation are all in the hands of a single person.
Register your company with Vakilsearch to have access to the flexibility of selecting from the most outstanding professional services at reasonable pricing. Easy access to top lawyers, accountants, and professionals through user-friendly internet services. Vakilsearch provides you with immediate assistance and answers to your business demands.
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