How to Start and Operate One Person Company in India?

 

Today, many youngsters come forward to start their own businesses because of the simplification of OPC registration in India. Starting a one-person company is more beneficial than other forms of companies for an individual. It is one of the safest options for those who want to invest less capital and register a company.

Many individuals have no idea about starting a new one-person company. This blog explains the procedure of starting a one-person company in India and the ways to operate it smoothly.

Meaning of One Person Company

OPC or One Person Company is a type of company established by a single person. An individual acts as a shareholder and director in the company. OPC is a kind of sole proprietorship involving only one person. It also gives sole authority to one person to control the whole business.

The concept of One- Person Company came into existence a few years back. The main governing act of OPC is the Companies Act 2013. OPC has fewer compliance requirements than other types of companies. It also gives limited liabilities to the member.

Who is eligible to form One- Person Company?

There are some criteria to form a One- Person Company such as:

·      Individuals only from India can only start an OPC.

·      One person cannot start more than 1 OPC in India.

·      Minor can neither be a member nor a nominee in one Person Company.

Requirements to start an OPC

At least one shareholder and director and one nominee are required to start a One-Person company. The minimum authorized capital to start a private limited company is INR 1 lakh. You should also offer certain documents to start an OPC such as:

Ø A hard copy of the Class-II form fully filled. 

Ø If you are a foreign national, it is necessary to give a self-attested copy of any ID proof such as a Passport.

Ø You have to provide a self-attested copy of any address proof which includes a ration card, passport, Aadhar card, voter ID, utility bill, and driver’s license.

What is the procedure for one-person company registration?

Today, a One- person Company Registration has become much simpler than before. It is also an affordable procedure to begin a one-person company through an online site. You do not need any other person to form a One-person Company. Any individual can start One Person Company by taking a few steps such as:

·      The first step is to check eligibility for registering a one-person company and the documents required.

·      Then you must choose the professional who will help to find a unique name for your company.

·      The next thing you must do is apply for the DIN and DSC of every director.

·      Now, the professionals will prepare all the important ROC forms like AOA, MOA, COB, DIR, and others. Then they will file these documents before the Ministry of Corporate Affairs (MCA).  

·      The next step is to apply for TAN and PAN for your new one-person company.

·      Then ROC will issue an incorporation certificate

·      Finally, you have to open a new bank account and begin business operations.

Following these steps will help in creating One Person Company. You can also choose a professional to complete the process of registration for OPC.

Benefits of registration of OPC in India

One-Person company incorporation is good for individuals who want to start business activities with low capital. There are several advantages of One Person Company in India such as:

1. Simple administration

A one-person company involves one person only. It is simple to handle OPCs because of their small size. Apart from that, it is also easy to control the full business in the case of a one-person company.

2. Security

As the name of your company is unique, no other company can copy your company’s name. There are no chances of a security breach in the case of a one-person company.

3. No complicated tax formalities

Companies such as Private companies and public companies have complicated tax formalities. So, it is easy for individuals to file income tax in the case of OPC. There are no tax complications in the case of One Person Company.

4. Separate legal status

Registering a one-person company gives a separate legal entity to the company. So, the member is not liable to pay for any loss to the company. Due to the limited liability of the members, one does not have to pay for losses. Personal security is not at stake in the case of a one-person company. Moreover, it is a safe option to start a one-person company as it has limited liability.

5. Helps in getting loans for business

After registration of OPC, it is easy to get bank loans easily. Apart from that, you will also get tax credit in the case of OPC. You can also expand and grow your small business in many other states with easy registration.

6. No third-party

Registration of a One-person Company involves only one person. There is no intervention of a third party or outsider in your business. So, it is easy to manage all the business operations without the interference of third-party or outsiders. Moreover, the registration of OPC gives authority to manage the whole company.

Other reasons to choose OPC registration 

Many individuals go for One-person Company registration because of other reasons such as:

·      After the death of a member, another person will become a nominee. In the case of the death of a member, the nominee will manage the whole company and its operations.

·      There is no requirement of holding an annual general meeting every year in a One-person Company.

·      There is less paperwork involved in the formation of a one-person company.

·      There is no risk of putting personal property at stake in the case of loss in the company.

·      Compliance in a One-person Company is less as compared to other forms of companies.

·      You will enjoy a limited liability by registering OPC.

·      You can also get loans easily to expand your business activities.