Advantages of One Person Company (OPC)
Advantages of One Person Company (OPC) include the following:
- Legal Status:Â An OPC obtains a separate legal entity status, safeguarding the individual who founded it from personal liability for company losses.
- Easy Fundraising:Â Being a private company, OPCs find it easier to raise funds through venture capitalists, angel investors, and banks compared to proprietorship firms.
- Reduced Compliance:Â OPCs enjoy certain exemptions from compliance requirements under the Companies Act, 2013, simplifying administrative obligations.
- Simple Incorporation:Â OPCs can be established with just one member and one nominee, with the member also serving as the director. No minimum paid-up capital requirement simplifies the incorporation process.
- Efficient Management:Â With a single person managing the OPC, decision-making is swift, leading to efficient company management without conflicts or delays.
- Perpetual Succession:Â OPCs maintain perpetual succession, ensuring the company’s continuity even with only one member.
In conclusion, OPCs offer several advantages, including limited liability, ease of fundraising, reduced compliance, straightforward incorporation and management, and perpetual succession.
Disadvantages of OPC
While OPCs offer advantages, there are also limitations:
- Suitable for Small Businesses:Â OPCs are primarily suitable for small-scale businesses as they can only have one member. This limits their ability to raise additional capital as the business expands.
- Restriction on Business Activities:Â OPCs are restricted from engaging in certain activities, such as non-banking financial investments and charitable objectives.
- Ownership and Management:Â There’s a lack of clear distinction between ownership and management in OPCs, as the sole member can also be the director. This can potentially lead to ethical concerns or conflicts of interest.
How do I Register One Person Company (OPC Registration)?
Registering a one person company is simple and affordable through E-StartupIndia professionals.
Unlike private limited companies, you do not need to arrange two or more people for company directorship. You can incorporate one person’s company alone without shaking hands with another person.
Registering One Person Company is quick, simple, and can be done online with few easy steps:
Step 1:Â Consult our advisors who will guide you through checking eligibility and documents requirement
Step 2:Â Our team will assist you find unique company name available on MCA records
Step 3:Â We assist you applying for DSC & DIN of the director
Step 4:Â Our professionals shall prepare all necessary ROC forms such as MOA, AOA, Spice , DIR, COB, etc) and file before Ministry of Corporate Affairs [MCA]
Step 5:Â Deliver you Certificate of Incorporation, PAN, TAN and all other necessary documents
Documents Required for OPC Registration
# Document of the Company Director
1. Photo
2. PAN
3. Aadhar
4. Address Proof*
5. Proof of Identity**
#Proof of the Company’s Registered Office Address
1. Latest electricity bill
OR
any other utility bill in the name of the owner
2. Rent agreement b/w owner & company promoter
OR
NOC from Owner (if owner is the company’s promoter)
*For Address Proof: Bank Statement, Electricity Bill, Telephone Bill, Mobile Bill. (Anyone, not older than 2 months).
**For Proof of Identity: Driving License, Voter ID card, Passport (Anyone).
Compliances for a One Person Company
Certain compliances are outlined in the Companies Act of 2013 and must be met by the specified deadlines. These regulations provide openness, good governance, and safeguard the interests of all parties involved, including the ROC, shareholders, directors, investors, and tax authorities. These compliances can be divided into annual compliances, recurring compliances, post-incorporation one-time compliances, and compliances dependent on events. The first category of one-time compliances has been thoroughly covered here.
One Time Compliance
A one person company must immediately comply with specific legal requirements outlined by the Companies Act of 2013 and, if necessary, secure local registrations in accordance with the state laws of the location where the OPC is conducting business. The complete list of compliances along with their deadlines is shown below. For in-depth discussions, contact one of our startup advisors.
Note:Â The due date for Compliance Requirement 4 is a bit more complex, so we have broken it down into its component parts to provide clarity.
