The concept of One Person Company / One Man Company has been derived from the Companies Act, 2013. Earlier there was no any concept of OPC in India under the previous Acts.
OPC is the advanced version of Sole proprietorship, which gives all benefits of a private limited company under section 3(1)(C). The first OPC in India was incorporated on 28th April, 2014 under ROC- Delhi jurisdiction.
Section 2(62) of Companies Act, 2013, defines the meaning of an OPC. "One Person Company" means a company which has only one person as a member.
HOW OPC IS DIFFERENT FROM THE SOLE PROPRIETORSHIP:
| OPC | SOLE PROPRIETORSHIP |
| Separate legal entity, distinct from its member.Nominee must be appointed for succession of business.Liability of Member is limited.Registered as a Private Limited company.Easy to get loans. | No distinction between Members and the Company.No any concept of Nominee, succession of business through execution of Will.Solo liability of member.Registered as a sole proprietorship firm.Getting loan is not so easy. |
WHO IS ELIGIBLE TO FORM AN ONE PERSON COMPANY (OPC):
Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC.( Resident in India means a person who stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one calendar year.)
A member of an OPC shall neither become the member of more than one OPC at a time. Nor he became the nominee of more than one OPC.
HOW TO INCORPORATE AN OPC:
(Under Companies Act, 2013 read with the companies (Incorporation) Rules, 2014)
Incorporation through SPICe (with RUN):
- Name Reservation: RUN service shall be used for name availability.
- Incorporate OPC: After name approval, form SPICe shall be filed for incorporation of the OPC within 20 days from the data of approval of RUN.
- The company shall file form INC-22 within 30 days once form SPICe is registered in case the address of correspondence and registered office address are not same.
Documents Required For OPC Registration:
1. Details of Director (promoter)
- Copy of PAN and Aadhar card
- Permanent address of the Director
- Present residential address ( Duration of stay at present address)
- Identity proof (Voter ID/ passport/ Driving licence)
- Proof of Residence (Bank Statement/ Electricity bill/ Telephone bill/ Mobile bill)- not older than 2 months
- Education Qualification of Director
- Mobile Number
- Email Id
- Place of birth
- Passport size photograph
- Specimen signature in Form INC-1o
2. Proposed Name of Company (Two names)
3. Registered address of the company.
4. Proof of Registered office address ( conveyance, lease deed, Rent agreement along with rent receipt).
5. Copy of utility bill
6. E-mail Id of the company
7. Capital structure of the Company.
8. Main business activity of the company.
Requirement of INC-3 (OPC Nominee consent form):
- Name of Nominee
- DIN/PAN
- Occupation
- Education qualification
- Mobile number
- Identity proof (Voter ID/ passport/ Driving licence)
- Proof of Residence (Bank Statement/ Electricity bill/ Telephone bill/ Mobile bill)- not older than 2 months
- Permanent address and present address (duration of stay at present address)
Restriction in carrying on certain activities:
An OPC can't carry out Non- banking financial Investment activities, including investment in securities of any body corporate.
As per Rule 6 of the Companies (Incorporation) Rules, 2014, If the Paid-up capital of an OPC exceeds INR 50 lacs or its average turnover during the relevant period exceed INR 2 crores, it shall ceases to be entitled to continue as an OPC.
Note: Earlier it was difficult for an Individual to run a company alone. Because there was a concept of Minimum 2 directors required for formation of a Private limited company. So, people who don’t want to share their business with other person have only one option left, “Sole proprietorship business” . But, now after the introduction of concept “OPC” every individual citizen who is resident of India can incorporate their own company as an OPC private limited. Only by following the simple steps of incorporation. Small entrepreneur can carry on their business in form of OPC with status of separate legal entity. The concept is good for entrepreneur with new ideas and venture trying to explore the corporate world with the minimum compliances and maximum benefit as exemption.
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