OPC Company Registration
The Companies Act of 2013 has brought to India what has long been sought in this land of proprietorships and partnerships – the possibility that a person who is starting alone can start his or her own company.
A One Person Company, as the name suggests, is a Company which is owned and operated by just 1 person. Only individual who is a citizen and resident in Indian can incorporate OPC. There are some restrictions in OPC
- Individuals who is a citizen of India and resident in India allowed to form One Person Company.
- Maximum Capital allowed in OPC is Rs.5000000 (Fifty Laks)
- Maximum turnover in an year is Rs.20000000 (two crore).
- OPC cant' be converted into private limited or public limited within a period of 2 years from the date of registration.
- Foreign nationals and NRI not allowed to incorporate OPC
Differences Between OPC and Private Limited
- An OPC is open only to naturally born Indians, and people of foreign origin or foreigners cannot open a One Person Company. While this seems unfair, the reason probably is that the antecedents of a naturally born Indian are far easier to track than a foreigner. A foreigner has to still open a normal Private Limited Company
- As the name suggests, only 1 Director is necessary in the case of a One Person Company, unlike a Private Limited Company which needs to have atleast 2 Directors. In the case of a One Person Company, it can have a maximum of 15 Directors, while in the case of a Limited Company, it can have upto 50 Directors.
- : A One Person Company need not hold any Annual General Meeting or pass any board resolutions. All that the founder needs to do is to record all the proceedings in a minutes book
Main Benefits of One Person Company
- Less Compliance compared to private limited and public limited. This is a major relief and OPC not required hold board meeting in every quarter/half year compared to other types of company
- One person required to form OPC. As the name suggest, OPC is created by one person, but one more person as nominee also required to create OPC
- One Director only required for OPC. in case of private limited minimum 2 directors required and public limited it is three.
Wha tare the procedure to start a One Person Company?
The procedure to start a One Person Company has not been notified, so watch this space!
- One Person Company has to be incorporated with the Registrar of Companies like a Private Limited Company
- One Person Company will be subjected to similar checks for getting the name approved and the registered office address like a Private Limited Company
- One Person Company incorporation should take anywhere between 1-5 days
Is the One Person Company good news or bad news?
As such, every person in India could start a Pvt. Ltd. Company with just his father, mother, relative or friend with the other person holding just 1 share (in effect a single person Company)
However, the One Person Company will definitely encourage more proprietors to start a One Person Company instead of forming a Proprietorship.
On the point of rules and regulations, there are definitely fewer rules and regulations surrounding a One Person Company. However, entrepreneurs please note that you still have to file Annual Returns, pay corporate tax and prepare basic documentation. (only Board Resolutions and the AGM need not be conducted)