According to sub-section 62 of section 2 of the Companies Act, 2013 One Person Company is introduced to promote business enterprises owned and managed by a single entrepreneur. According to section 3 it is defined as a private company with only a single director with Indian nationality. It helps those individuals who are looking for an opportunity to expand their business and help the unorganised sector of our country to be organised legally. There is no need for a mandatory minimum of two directors, as is the case in Private Limited Company incorporation.
The salient feature of One Person Company is that it needs only one founding member who is the sole shareholder and director of the company yet there are few regulations as
One person company has been preferred over another form of investment incorporations by a lot of budding freelancers and entrepreneurs primarily because of minimal legal compliances and maximum taxation benefits a few examples being
One Person Company is a concept introduced to encourage entrepreneurs who have the capital to invest in their own company and become the only director without sharing their funding with others. It is aimed at the country’s economic development and economic growth under the MAKE IN INDIA scheme. It has various advantages
One Person Company is a separate legal entity with a single member whereas sole proprietorship is not a Separate Legal Entity.
One person company needs to be registered while no such registration is required for a sole proprietorship. The finances and loan repayments depend on the owner in sole proprietorship and not on the company thus making it an unlimited liability whereas any loss in business is limited to only the business assets in OPC making it a limited liability.
Apart from having similarities with private companies there are some factors which make OPC a completely different entity.
Here are a few disadvantages of OPC over other private incorporations.
The registration cost to register for one person company including professional fees is approx INR 8,999/-.
Step - 1 : Digital Signature
The first step is to avail the digital signature of the proposed director along with the documents mentioned above.
Step - 2 : Digital Identification NO.: after we receive the signature we head to acquire digital identification no. Of the proposed director in SPICEe form.
Step - 3 : Name approval application: after the verification of documents we propose a name for the company and apply for the same from the MCA. The name should be clear to indicate what the Company is all about. The only condition is that no company can register without having (OPC) Private Limited or limited at the end. For example Ashiana Buildtech Pvt. Ltd. (OPC).
Step - 4 : Documents to ROC: after the approval of the name we file for documents to submit to ROC
Step - 5: Office proof: next we will require registered office proof Lease deed / Conveyance / Rent agreement along with rent receipts and proof of ownership along with NOC. Affidavit and consent of the proposed director with form INC-9 and DIR-2rsp.
Step - 6: MCA approval forms: along with other documents SPICe Form, SPICe-MOA and SPICe-AOA and DSC of the Director and the professional will be uploaded to the MCA site for approval. , Form 49A and 49B will be generated for the PAN and TAN generation of the Company which has to be uploaded to MCA after affixing the DSC of the proposed Director.
After submitting and getting all the documents verified we will receive Certificate of Incorporation from ROC and then we can commence our business.
For converting OPC private company there are two methods one involves voluntary conversion while other is mandatory conversion.
OPCs are doing very well in the United States, U.K, Australia etc. The one person company concept is a relief to many entrepreneurs as it helps small businesses to evolve. Thus we conclude that one person company was introduced to help the country’s growth by giving opportunities to generate employment and also help in economic development.