One Person Company is a new type of business entity that allows a single entrepreneur to operate a corporate entity with limited liability protection.
The concept of One Person Company (OPC) is a new form of business, introduced by The Companies Act, 2013. This concept giving an opportunity to the entrepreneur(s) carrying on the business in the sole proprietor form of business to enter into a corporate framework.
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Minimum number of director required is one.
Liability of sole member is limited.
One person company is treated as separate legal entity.
No need to call annual general meeting (AGM) during the year.
One person company is a form of private limited company in which a single person can start the company.
Only one shareholder:- Only a natural person, who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company.
The one person Company (OPC) is legal entity. The members of an OPC have no liability to the creditors of an OPC for such debts. The death, bankruptcy or withdrawal of capital by one member does not affect the OPC’s ability to trade.
The most significant reason for shareholders to incorporate the ‘one person Company’ is certainly the desire for the limited liability. Shareholders are only liable for their share of money they invested in the company. Their Personal assets are safe.
There are many allowances and tax deductible cost that can be offset against the profits of an OPC and the tax would be paid after deducting many costs incurred by members. In addition to that the current level of Corporation Tax is lower than income tax rates.
The compliance procedure becomes simpler as they have been provided many exemptions in comparison to Private Limited Company. In other words less compliance has to be done by one Person Company and intimation to the roc compression to other structure is very less.
Banking and financial institutions prefer to lend money to the company rather than proprietary firms. In most of the situations Banks insist the entrepreneurs to convert their firm into a Private Limited company before sanctioning funds. So it is better to register your start-up as a One Person private limited rather than proprietary firm.
OPC can transfer the entire share holding to any person who is concerned. These changes of ownership, saves the time and money. If in the case of the member dies, the nominee undertakes the affairs of the company so automatically holding of member will transfer to nominee.
| DO’S | DON’TS |
|---|---|
| 1 At the end of financial year annual filling must be file to the registrar of companies. | 1 A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company. |
| 2 OPC shall file with Income Tax Return every year before 30th September. | 2 An OPC cannot be incorporated or converted into a company under Section 8 of the companies Act 2013. (Non profit Organisation). |
| 3 Maintain Proper Books of Accounts and Prepare and File Balance Sheet. | 3 An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of anybody corporate. |
| Sole Proprietorship | OPC |
|---|---|
| 1 No Separate Legal Entity | 1 Separate Legal Entity |
| 2 Unlimited Liability | 2limited Liability |
| 3 Debt is sole responsibility of the proprietor | 3 Debt is not the sole responsibility of the shareholder. |
| 4 May register in Shop & Establishment Act | 4 Follow Companies Act, 2013 |
| 5 Paid by owner | 5 Separate tax |
Nominee can be anyone, such as your spouse, father, mother, daughter, brothers, sisters etc., but they should hold proper identity proofs such as PAN card, Voter id or Passport or Driving License etc., in order to be appointed as Nominees for One Person Company.
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OPC Registration with DSC, DIN, Name Approval, Incorporation Fee, PAN, TAN, Share Certificates, Company Kit and Bank A/c opening Assistance Services.
OPC Registration with DSC, DIN, Name Approval, Incorporation Fee, PAN, TAN, Share Certificates, Company Kit, 1 Year ROC Secretarial Compliance Fillings.
OPC Registration with DSC, DIN, Name Approval, Incorporation Fee, PAN, TAN, Share Certificates, Company Kit, 1 Year ROC Secretarial Compliance Fillings and Trademark Application.
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