Legaljini
account sourcing in mumbai

One person company

One person company

The Companies Act, 2013 permits a new category of company viz., One Person Company (OPC). It can only be formed as a Private Limited Company. Only a natural person who is an Indian Citizen and resident in India shall be eligible to incorporate OPC or be appointed as a nominee for the sole member of OPC. Small businessmen, entrepreneurs, artisans, weavers or traders among others can take advantage of the ‘One Person Company’ (OPC). It's a Private Company having only one Member and at least One Director. One Person Company is a useful option for small entrepreneurs who want to give their business a distinct identity with lesser legal compliance.

When an OPC has a paid-up capital that is equal to or more than Rs. 50 lakhs or the annual turnover for the relevant financial year exceeds Rs. 2 crore, then in such conditions, the company has to compulsorily convert itself into Private Limited Company or Public Limited Company. OPC can voluntarily be converted into any type of company after two years from the date of incorporation irrespective of whether the paid up capital exceeds Rs. 50 lakhs or not or its average annual turnover during the relevant period exceeds Rs. 2 crore or not. Legaljini can help you with the establishment of the One Person Company (OPC) by obtaining relevant registration.

 

Advantages of One person company

Minimum compliances:

The compliance requirements for a OPC are very minimum as compared to a private limited company. Hence OPC can  focus better on other functional and core areas.

Distinct identity:

The biggest advantage of an OPC is that its identity is distinct from that of its owner. Therefore, if the firm is embroiled in a legal controversy, the owner will not be sued, only the company will be sued.

No requirement to hold Annual General Meeting or Extra-Ordinary General Meeting:

Since there is only one member, there is no requirement of holding Annual General Meeting or Extra-Ordinary General Meeting

Limited Liability:

The another advantage of OPC is limited liability whereby the liability of the member will be limited. It means, responsible only to a limited amount for debts of a company. This benefit is not available in case of a sole proprietorship.

One Person Company Formation Process (OPC)

A minimum of two designated partners are required to form a LLP.

01

Digital Signature Certificate

Propose a director and obtain Digital Signature Certificate (DSC).

02

DIN Number

Obtain Director Identification Number (DIN) for the proposed director.

03

Application

Select a suitable company name and forward the application to Ministry of Corporate Affairs (MCA) for availability of name.

04

Drafting

Draft its Memorandum of Association (MOA) and Articles of Association (AOA).

05

Signature and Submission

Sign the necessary documents like MOA and AOA and submit them electronically with the Registrar of Companies (ROC).

06

Payment

Payment of requisite fees to Ministry of Corporate Affairs along with the stamp duty.

07

Scrutinity

Get the documents scrutinized with ROC.

08

Certificate

Obtain Certificate of Incorporation.