One Person Company is a new type of business entity that allows a single entrepreneur to operate a corporate entity with limited liability protection. Introduced by the Companies Act 2013 as an improvement over the sole proprietorship it gives a single promoter full control over the company while limiting his/her liability to contributions to the business. This person will be the only director and shareholder. There is a nominee director but with no power until the original director is incapable of entering into contract. If an OPC hits an average three-year turnover of over Rs. 2 crore or has a paid-up capital of over Rs. 50 lakh, it must be turned into a private limited company or public limited company within six months.
HOW WE CAN HELP YOU TO START
- We will help you get your Digital Signature (DSC) and Director identification Number (DIN)
- We will then help you pick a unique name using RUN (Reserve Unique Name) with MCA (Ministry of Company Affairs)
- We will help you draft the company MoA (Memorandum of Association) and AoA (Articles of Association)
- We will complete the SPICe form (Simplified Proforma for Incorporating Company Electronically)
- We will send in a request to the NSDL for company PAN & TAN
Identity Proof of director and nominee director
Self-attested scanned copy of PAN Card (both director and nominee) – NRI/ foreign resident are not eligible to form OPCs
Address Proof of director and nominee director (Any One)
- Driving license
- Aadhaar card
- Electricity bill
- Bank statement (less than 2 months old)
Registered Office Address Proof:
- Rental Agreement OR sale/registration deed (if owned)
- Copy of recent utility bill (electricity/water) or property tax receipt
- No objection certificate from landlord for use of property as registered office (for rented offices)
- Signed Digital Signature Application (hard copy)
- Other incorporation digitally signed and uploaded as soft copies
WHAT YOU HAVE NOW
- DIN for one director
- Digital signature token for director and nominee
- MoA & AoA (Memorandum of Association & Articles of Association)
- Incorporation Certificate from MCA with CIN (Corporate Identity Number)
- Company PAN card
- Company TAN number
- All supporting documents for opening bank account
SUPPORTING YOUR ON-GOING BUSINESS
- We can maintain your accounts and give you periodic progress reports at end of every month
- We can file your TDS & GST returns
- We can compile and file your income-tax returns
FEATURES OF ONE PERSON COMPANY (OPC)
A company has ‘perpetual succession’, meaning uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership. it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and maybe struck off from the register after a period of time
Ownership of a business can be easily transferred in a company by transferring shares. The signing, filing and transfer of share transfer form and a share certificate is sufficient to transfer ownership of a company. In a one person company, the ownership can be transferred by altering the shareholding, directorship and nominee director information.
Banks and Financial Institutions prefer to provide funding to a company rather than partnership firms or proprietary concerns. However, a one person company cannot issue different types of equity security, as it can only be owned by one person at all times.
A company being an artificial person, can acquire, own, enjoy and alienate property in its name. The property owned by a company could be machinery, building, intangible assets, land, residential property, factory, etc. Also the nominee director cannot claim any ownership of the company while serving as a nominee director
ADVANTAGES OF ONE PERSON COMPANY REGISTRATION
Protection of promoters’ personal assets
Many times start-ups need to borrow money and take things on credit. In case of sole proprietors promoters’ personal savings and property would be at risk in case business is not able to repay its loans. Here only investment in business is lost, personal assets of the directors are safe.
Professional image and credibility
In India, OPC has being growing in popularity and is now a well- known business structure. Corporate customers, vendors and government agencies are more comfortable dealing with them as compared to proprietorship firms.
Easy to Manage and Freedom from Compliances
OPC is one of the easiest forms of corporate entities to manage. There are very few ROC filings and there is no need to conduct Annual General Meeting (AGM) and other regular compliances.
Vehicle for testing business model and enabling seed funding
Start-up Entrepreneurs to easily test their business model, and upon building a marketable product, they can approach Angel investors, Venture capitalists for funding and easily convert their OPC into multi shareholder Private Limited company.
Complete Control of the operations
An OPC can appoint as many as 15 directors for administrative functions, without giving any share to them. This can lead to induction of talent and experience without diluting control
Easy to Sell OPC
OPC Company is easy to sell – there is very little documentation and cost is involved.
Digital Signature (DSC):
What is a Digital Signature Certificate (DSC)? The Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by the companies under MCA21 e-Governance program are required to be filed with the use of Digital Signatures by the person authorized to sign the documents.
A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of a proposed Company.
Class of DSC
The Ministry of Corporate Affairs has stipulated a Class-II or above category signing certificate for e-filings under MCA21. A person who already has the specified DSC for any other application can use the same for filings under MCA21 and is not required to obtain a fresh DSC.
Required documents for getting DSC:
- Specified Form filled as per given guidelines
- ID proof of the applicant (Copy of the PAN card should be attested by the Gazetted officer/Bank manager/Post master).
- Address proof (Passport/Aadhaar card/Driving License/Voter Id/Latest Utility Bill like Electricity bill, Telephone bill, Water bill, Gas bill, etc, Property Tax receipt). This needs to be attested by a Gazetted officer/ Bank manager/ Post master.
- Passport size photo(3.5 cm X 2.5 cm)
Director Identification Number (DIN):
The concept of a Director Identification Number (DIN) has been introduced for the first time with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006. As such, all the existing and intending directors have to obtain DIN within the prescribed time-frame as notified. DIN is a unique identification number allotted to an individual who is an existing director of the company or intends to be appointed as director of a company. DIN is an 8 digit number
Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.
It is the amount of shares a company can issue to its’ shareholders. Companies have to pay the Government an authorized capital fee to issue shares in a Company. Companies have to pay authorized capital fee for a minimum of Rs.1 lakh. There is no requirement to show proof of capital invested during the incorporation process.
Eligibility to form OPC:
- To incorporate a One Person Company, a Director and a nominee is required. A nominee member is one, who shall, in the event of promoter member`s death or incapacitation become a member of the Company.
- Only a natural person who is an Indian citizen and a resident in India is eligible to incorporate a One Person Company or be a nominee member. The Director or Nominee must also be over 18 years of age. A person can incorporate upto five One Person Companies.
An address in India where the registered office of the One Person Company will be situated is required. The premises can be a commercial / industrial / residential where communication from the MCA will be received.In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.
The basic mandatory compliance include-
- Maintenance of proper books of accounts
- Statutory audit of Financial Statements
- Filing of business income tax return every year before 30th September
- Filing Annual ROC return which includes form MGT 7