One Person Company | Adaptation Economics Tax Consultants

One Person Company (OPC)

OPC Private Limited Company is a most popular option to start a business in India by those people who are Proprietor (Single). OPC Private Limited company is incorporated under the Companies Act of 2013, and governed by the Ministry of Corporate Affairs (MCA). It is a registered entity with separate legal identity from its owners. It has key advantages like the ability to contract in its own name, and safeguard personal assets of the owners from business liabilities and Tax advantage. This option is chosen by those people who don’t want any other participation in their equity.

Restrictions

All you need to start is one shareholder and one Director. There are some restrictions with OPC, which are:

1. One person can not incorporate more than one OPC.

2. It can not have a paid up share capital of more than Rs. 50 Lakhs or Average Turnover of Rs. 2 Crores.

3. It cannot be engaged in carrying out NonBanking Financial Investment Activities.

4. It can not be converted into any other type of company unless a time of two years after incorporation has been passed, or else at crossing the paid up share capital or turnover thresholds.

Advantages of One Person Company Registration

As mentioned above One Person Company is the hybrid of Sole Proprietorship and Company form of business. Here are the features of the OPC:

No Minimum Capital - There is no minimum capital required for OPC registration. However, the maximum Authorize capital of One Person Company shall not exceed Rs 50 lakhs at any point in time.

Liability on Director is Limited - There is a limited liability related to One Person Company which means the liability on the Director is limited. The personal asset of the Director won’t be attached to the debt of the business. The property is safe.

Fewer Compliances - The compliances under OPC registration are very less as compared to any other company. OPC registration process can be done with minimum paperwork.

Continuous Existence - The death or illness or incapacity of the director won’t disturb the ongoing process of the company as the nominee director will hold the rope to continue the business.

Greater Credibility - As an OPC needs to have its books audited annually, it has greater credibility among the vendors and the lending institution.

No legal Disputes - Now, when the company is registered with one person, then there is no chance of any legal disputes arises between the director or any other third party.

Documents Required

Documents required for One Person Company Registration

1. Pan Card – PAN Card of Directors and Nominee.

2. Registered office Proof – Latest Electricity Bill/ Telephone Bill/Water/Gas Bill of the registered office address.

3. Identity Proof – Aadhar card/Voter ID/Passport/Driving License of Directors and Nominee.

4. NOC from Owner – No Objection Certificate to be obtained from the owner(s) of registered office.

5. Address Proof – Latest Telephone Bill/Electricity Bill/Bank Statement /Gas/Water Bill of Directors and Nominee.

6. Rent Agreement – If Property is taken on Rent, then rental agreement required.

7. Photograph – Latest Passport size Color photograph of Director.