One Person Company Registration

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One Person Company Registration

The Companies Act 2013, introduced the concept of One Person Company (OPC) in India. It encourages self-employment within the ambit of India's legal system. There can be only one member in an OPC. Its main characteristic is that only one shareholder who owns 100% stake of the company. To maintain the character of perpetuity, the appointment of the nominee is compulsory, who will take place of the owner in case of death or his inability. One person company is a type of Private Limited Company.

Procedure For Formation of One Person Company Through Popcorn Infotech ?

Benefits Of Formation Of One Person Company

(A) Individual Entrepreneurship

OPC gives the individual entrepreneurs all the benefits of a company, which means they will get credit, bank loans, access to market, limited liability, and legal protection available to companies.

(B) Opportunities For Small Businessmen

OPC would provide tremendous opportunities for small businessmen and traders, including those working in areas like handloom, handicrafts and pottery.

(C) Separate Legal Existence

A company is a Separate legal entity from its Owners and Management in the eyes of law.It can have a PAN number, bank accounts, licenses, approvals, contracts, assets and liabilities in its unique name.

(D) Management and Ownership Separation

Management & shareholders can be separated. A shareholder can invest the fund in fruitful business without managing & Management can operate their business without frequent interruption of investors.

(E) Lower Compliance Requirements

The compliance requirements are lesser in comparison to the private company.Compliances like holding General and Board Meeting, etc. are not applicable to OPC. However, Board Meeting must be held if more than one director is on Board.

(F) Limited Liability

Shareholder enjoys limited liability to the extent of capital invested. In case of any unforeseen liabilities, it would be limited to the company and not impact the shareholders. Shareholder's personal assets protected in the event of the company's insolvency.

(G) Capacity to Sue and to be Sued

OPC can take legal action against another and also other person can take legal action against company separate from directors, shareholders & promoters.

Limitations Of One Person Company

(A) Resident of India Only a natural person who is a resident of India in the preceding calendar year (who has stayed in India for a minimum of 182 days) can form an OPC. Therefore, a minor, foreign citizen, non-resident, or any person incapacitated by contract are ineligible to form an OPC.
(B) Limited Number of Incorporation The member of the OPC cannot incorporate more than one OPC.
(C) NBFC Restriction It is pertinent to note that the rules do not permit non-banking financial institutions (NBFC) to Register as OPC.
(D) Turnover In case the Annual turnover of OPC crossesRs. 2 Crore, it must be converted into a Private Limited Company. Further, audited financial statements must be filed with the Ministry of Corporate Affairs at the end of each financial year.

(E) Capital In case the Paid-Up Share Capital of OPC exceedsRs. 50Lakhs, it must be converted into a Private Limited Company.

Compare Other Business Registrations

Characteristics	OPC	Pvt. Ltd. Company	Proprietary Concern	Partnership Firm<	LLP
Separate Legal Entity	YES	YES	NO	NO	YES
Governing Act	Companies Act, 2013	Companies Act, 2013	No specific Act	Indian Partnership Act, 1932	Limited Liability Partnership Act, 2008
Registration	Mandatory	Mandatory	Not Reuqired	Optional	Mandatory
Liability	Limited	Limited	Unlimited	Unlimited	Limited
No. of Members	1 Member and 1 Nominee	2 - 200	Only 1	2 or more partners, 10 for banking , 20 for non-banking	2 or more partners
Dissolution	Legal procedures for winding up orliquidation as the case may be	Legal procedures for winding up orliquidation as the case may be	The proprietor has the sole authority	The proprietor has the sole authority	With Consent of partners
Succession	Nominee	A company has perpetual succession	Legal Heir	Remaining Partners and Legal Heir of deceased partner with consent of other partners	Remaining Partners
Filing of financials with regulatory authorities	Financial statements are to be filed annually with Registrar of Companies	Financial statements are to be filed annually with Registrar of Companies	Not Applicable	Not Applicable	Financial statements are to be filed annually with Registrar of Companies
Filing of forms for creation of charge (in case of loans taken).	Required to file adequate forms with Registrar of Companies	Required to file adequate forms with Registrar of Companies	No legal formalities	No legal formalities	Required to file adequate forms with Registrar of Companies
Statutory Compliance	Apart from Annual filing, compliances are less compared to Private Company	Apart from Annual filings, it has to comply with various provision laid down, but less compared to public company	No compliances and no requirement to file a separate ITR	Separate ITR of partnership is filed, else there is no filing requirement	Annual filing and few event based filings are necessary
Audit Compliance	Compulsory	Compulsory	Subject to turnover of the firm	Subject to turnover of the firm	Only if contribution more than Rs. 25 lakhs or turnover exceeds Rs. 40 Lakhs