With the latest and tremendous changes in business and making business setup easy in India, One Person Company is a unique concept introduced by the Ministry of Corporate Affairs in order to encourage the small traders and entrepreneurs. One of the major advantages of an OPC is that there can be only one member in an OPC, where in case of Private Limited Company or a Limited Liability Partnership minimum two persons are required. Similarly as in case of a company, a natural person, who is a citizen of India, shall be eligible for registering a One Person Company, with the requisite that the person should be resident of India. One Person Company is defined in the Companies Act 2013 as a Company which has only one member. A single shareholder holds 100 percent shareholding. One person can form a company without any additional shareholder, and if the member is willing to add shareholders, all he needs to do some procedural compliances to convert OPC in to a regular private limited company and file it before MCA.
To start an OPC is a quick mechanism and can be done within a period of 6-7 Days. It provides a quick start from legal procedural point of view. You can get an OPC registered with Ministry of Corporate Affairs very quickly.
Like any Company whether Private Limited or a Public Company, One Person Company has a distinct legal entity from its members which is capable of doing everything that an entrepreneur would do. In many aspects it has similar features to that of a Private Limited Company.
OPC will also be required to comply with the provisions as applicable to Private Companies. However OPC still enjoys a number of exemptions and therefore have lesser compliance burden as compared to a Private Limited Company.
One Person Company not only gives the entrepreneurs the legal status to the business but also a social recognition as it enjoys the same status as that of a Private Limited Companies which help the entrepreneur to attract quality workforce along with designation like Directorship which cannot be used by Partnership firms or Limited Liability firms.
Generally Banks prefer to lend loans to One Person Company rather than Proprietary Firms or Partnership Firms . In certain circumstances it is advisable to many entrepreneurs to start up business as One Person Company rather than Proprietary Firm and Partnership Firm.
Being the sole owner is the best advantage for incorporating an OPC which in turn makes decision making of the business more quick without much unnecessary intervention making functioning of business more smooth.
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An OPC is a good alternative to running a sole proprietorship, largely because it gives limited liability to the business owner. This means that your liability is limited to the amount you've invested in the business; business debts cannot be recovered from personal possessions. Also, a sole proprietorship ceases to exist on the death of its promoter. In the case of an OPC, the nominee director takes over and the entity continues to exist. Single entrepreneurs who do not have another partner to start a private limited company may also consider it.
An OPC has certain limitations. The person starting the business is its only director and shareholder. There is also a nominee director, but this person has no power whatsoever for raising equity funds or offer employee stock options. The nominee exists only to take over in case of the death or incapacitation of the director. The nominee is chosen by the director, and can be anyone, such as your spouse, parents or siblings. The nominee will need to provide identity proof during registration
All such businesses must maintain books of accounts, comply with statutory audit requirements and submit income tax returns and annual filings with the RoC.
Only Indian residents can register an OPCs, and that, too, only one at a time, as per the specifications of the Ministry of Corporate Affairs
Lalit Aggarwal & CO. can help in OPC registration on fast track mode with dedicated team. It takes appx. 7-15 working days for registration.
Yes. Residential address can be used for OPC registration. Most of start-ups uses same and changes later on.
No. The process followed by us for OPC registration is complete online. You just need to send scaned documents over email.
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