ONE PERSON COMPANY

The new company act has created an entirely new business structure – One Person Company (OPC)

An OPC has only one member and can be fully functional with a minimum of one director. , but with lesser compliances requirements. Although the OPC model is a new concept in India, it has been working successfully in developed nation since a long time.

Traditionally any for profit business from other than a sole proprietorship requires more than one members. Similarly, a private company also requires more than at least two members. In such addition, how did single addition single fonder or promoters start a company in India . – the company would typically issue one share to a relative of the promoter (for example their father, mother spouse etc). So, that the minimum requirement of two person was satisfied. Having additional shareholder with nominal share did not impact the business commercially.

STRIKING FEATURES OF ONE PERSON COMPANY

Features of One Person Company (OPC)

The following are the important features of the One Person Company (OPC)

One Person Company is one of the type of Company on the basis of number of members onlyOne Person Company has only one person as a member or as a shareholder.One Person Company is a Private CompanyMinimum paid up share capital of One Person Company is one Lakh Rupees (Rs. 1,00,000)One Person Company may be either a Company limited by share or a Company limited by guarantee / an unlimited CompanyThe words "" should be mentioned in brackets below the name of One Person CompanyOne Person Company shall indicate the name of the nominee or other person in the memorandum, with his prior written consentThe written consent above, can be filed with the Registrar at the time of incorporation of the One Person Company along with its M&A (Memorandum and Articles)The nominee or other person can withdraw his consent at any timeThe member/Shareholder of One Person Company may change the nominee/other person at any time, by giving notice to the other person and intimate the same to Company. Then the Company should intimate the same to the RegistrarIn case of the death of member or shareholder or his incapacity to contract, then nominee/other person become the member of the CompanyMember or Shareholder of the One Person Company acts as first director, until the Company appoints director(s)One Person Company can appoint maximum 15 directors, but minimum should be one directorOne Person Company need not to hold any AGM (Annual General Meeting) in each yearCash Flow Statement may not include in the financial statements of One Person CompanyOne Director is sufficient to sign the Financial Statements or Director's ReportWithin 180 days from the closure of the Financial Year, One Person Company should file the copy of the Financial Statements with Registrar about every contract entered and also should record in the minutes of the meeting with in 15days from the date of approval by the BOD (Board of Directors)

ADVANTAGE OF ONE PERSON COMPANY

Here are the 10 reasons why any entrepreneur or business entity should opt for One Person Company. as follows:

A Separate legal entity

One Person company is a separate legal entity and capable of doing everything that an entrepreneur would do.

Easy Funding

Like a Private company, One Person Company can raise funds through venture capital, financial institutions, angel investors etc. A One Person Company can raise funds thus graduating itself to a private limited company.

More opportunities, Limited liability

Since the liability of the One Person Company is limited to the extent of the value of the share you hold, the individual could take more risk in business without affecting or suffering loss of personal assets. It is the encouragement to new, young and innovative start-ups.

Minimum compliances

One Person Company have to face little compliance burden as compared to private limited companies , hence One Person Company can more focus on other functional and core areas.

Benefits of being a Small Scale Industries (S S I)

An One Person Company can avail the various benefits provided to Small Scale Industries like lower rate of Interest on loans, easy funding from bank without depositing any security to a certain limit, manifold benefits under Foreign Trade policy and others.

The Only Owner – You, only the owner helpful in quick decision-making, controlling and managing the business without following any elongated processes and methodologies as adopted in other companies. The sense of belonging inspires to grow the business further.

Credit rating

The One Person Company with bad credit rating may even get the loan. Credit rating of One Person Company will not be material if the rating of One person company is as per norms.

Benefits under Income Tax Law

Any remuneration paid to the director will be allowed as deduction as per income tax law unlike proprietorship. Other benefits of presumptive taxation are also available subject to income tax act

Receive interest on any late Payment

. The newly start-up One Person company is micro, small, or medium, hence they are covered under this act. As per the Act, if buyer or receiver receives any late payment (receives payment after specified period) , then he is entitled to receive interest which is three times the bank rate.

Increased Trust and prestige

Any business entity that runs in the form of company always enjoys an increased trust and prestige.

FACTS OF ONE PERSON COMPANY

OPC provides a whole new bracket of opportunities for those who look towards to start their own ventures with a structure of organized business. OPC will give the young businessman all benefits of a private limited company which categorically means they will have access to credits, bank loans, limited liability, , access to market etc all in the name of a separate legal entity.

Single entrepreneur can manage his business on his own. It can have only one member at any point of time. It may have only one director but as per the provisions of section 149 can however appoint more than 15 directors after passing a special resolution.

OPC company is like an One Man Army. The compliance burden is very less and the liability of the members is very limited is an added advantage. OPC is expected to benefit people who are into self employment and many small scale sectors. It is a remarkable feature of the Companies Act,2013. ".

OPC company registration procedures are both online and offline but you can avail this registration process from lega lraasta through online process without any problem. Not only OPC I have seen that they provide the various other company registration. They show the legal ways for the startups as well as running business who want any further changes.

An Indian citizen and resident in India shall be eligible to act as a member and nominee of an One Person Company. That the person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.

4 Main things to keep in mind:

A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.Person should be above of 18 years can become member or nominee of the One Person Company or can hold share with beneficial interest.An An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of anybody corporate.