Banaglore | Hyderabad
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info@hsradvisory.in
Hsradvisory is a consulting firm specializing in assisting individuals and entrepreneurs who are interested in establishing One Person Companies (OPCs). An OPC is a business structure that combines the advantages of both sole proprietorships and companies, offering individuals the opportunity to operate as a registered entity without the need for co-partners.
By transforming unstructured proprietorship businesses into structured private companies, OPCs pave the way for sole proprietors and start-ups to establish themselves in a more organized manner. As per Section 3(1)(c) of the Companies Act, 2013, an individual can form an OPC for any lawful purpose. Section 2(62) defines an OPC as a company that has only one person as a member.
An OPC is classified as a private company and typically has one director and one shareholder. This structure allows individuals to benefit from limited liability while operating as a sole proprietor. The emergence of OPCs represents a significant advancement in the corporate sector, fostering vital growth and providing new opportunities for businesses in our country.
Limited Liability: One of the primary benefits of registering an OPC is limited liability protection. As a separate legal entity, the OPC’s liabilities are not extended to the personal assets of the individual. This means that personal assets are safeguarded in case of any debts or legal issues faced by the company.
Sole Ownership: Unlike traditional companies that require multiple shareholders, an OPC allows for sole ownership. This is advantageous for individuals who wish to maintain full control and decision-making authority over their business without the need for co-partners.
Legal Recognition: Registering as an OPC provides legal recognition to the business entity. It enhances credibility and establishes a professional image, which can be beneficial when dealing with clients, customers, and other stakeholders.
Continuity and Perpetual Succession: An OPC has perpetual succession, which means that the company continues to exist even in the event of the death or incapacitation of the sole member. This ensures business continuity and facilitates the transfer of ownership through inheritance or other means.
Ease of Formation: Forming an OPC involves a streamlined process compared to other types of companies. It requires only one director and one shareholder, reducing the complexity and administrative burden associated with involving multiple parties.
Tax Benefits: OPCs can avail various tax benefits and incentives provided by the government. These include lower tax rates, exemptions, and deductions available to small businesses, which can contribute to cost savings and increased profitability.
Access to Funding and Contracts: Registering as an OPC may enhance the company’s eligibility to secure funding from banks, financial institutions, and investors. It also allows for easier participation in government tenders and contracts, opening up new business opportunities.
Professional Reputation: Operating as an OPC can enhance the professional reputation of the individual. It demonstrates a commitment to compliance, corporate governance, and structured business practices, which can attract clients and partners.
Limited Liability: One of the primary benefits of registering an OPC is limited liability protection. As a separate legal entity, the OPC’s liabilities are not extended to the personal assets of the individual. This means that personal assets are safeguarded in case of any debts or legal issues faced by the company.
Sole Ownership: Unlike traditional companies that require multiple shareholders, an OPC allows for sole ownership. This is advantageous for individuals who wish to maintain full control and decision-making authority over their business without the need for co-partners.
Legal Recognition: Registering as an OPC provides legal recognition to the business entity. It enhances credibility and establishes a professional image, which can be beneficial when dealing with clients, customers, and other stakeholders.
Continuity and Perpetual Succession: An OPC has perpetual succession, which means that the company continues to exist even in the event of the death or incapacitation of the sole member. This ensures business continuity and facilitates the transfer of ownership through inheritance or other means.
Ease of Formation: Forming an OPC involves a streamlined process compared to other types of companies. It requires only one director and one shareholder, reducing the complexity and administrative burden associated with involving multiple parties.
Tax Benefits: OPCs can avail various tax benefits and incentives provided by the government. These include lower tax rates, exemptions, and deductions available to small businesses, which can contribute to cost savings and increased profitability.
Access to Funding and Contracts: Registering as an OPC may enhance the company’s eligibility to secure funding from banks, financial institutions, and investors. It also allows for easier participation in government tenders and contracts, opening up new business opportunities.
Professional Reputation: Operating as an OPC can enhance the professional reputation of the individual. It demonstrates a commitment to compliance, corporate governance, and structured business practices, which can attract clients and partners.
One should fulfil the following eligibility criteria before registering as One Person Company: –
The followings are the documents required for registration of One Person Company:
Director/Shareholder Documents:
Registered Office Documents:
Declaration and Consent:
Additional Documents:
The applicant should follow the requisite steps for registration of One Person Company:
Obtain Director Identification Number (DIN): The first step is to obtain a Director Identification Number (DIN) for the proposed director of the OPC. DIN can be obtained by filing the DIN application with the relevant authority.
Obtain Digital Signature Certificate (DSC): A Digital Signature Certificate (DSC) is required for signing and filing electronic documents during the registration process. The proposed director should obtain a DSC from a certifying agency.
Name Reservation: Choose a unique name for the OPC and apply for name reservation with the appropriate authority. The name should comply with the naming guidelines specified by the jurisdiction.
Draft Memorandum of Association (MOA) and Articles of Association (AOA): Prepare the MOA and AOA, which outline the objectives, business activities, and internal regulations of the OPC. Ensure that the documents comply with the applicable laws and regulations.
Application for OPC Registration: Prepare the necessary documents, including the MOA, AOA, and other required forms. Submit the application for OPC registration along with the required fees to the designated authority. The application should also include details of the director and shareholder of the OPC.
Verification and Approval: The authority will review the application and supporting documents. If everything is in order, they will issue a Certificate of Incorporation, which signifies the successful registration of the OPC.
PAN and TAN Application: After obtaining the Certificate of Incorporation, apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the OPC. These are essential for tax compliance.
Bank Account Opening: Open a bank account in the name of the OPC using the issued Certificate of Incorporation and other required documents.
Compliance and Post-Registration Formalities: Fulfill any post-registration formalities, such as obtaining GST registration, professional tax registration, and other applicable registrations as per the nature of the business and the jurisdiction’s requirements.
It is advisable that an attorney with “Company Incorporation experience” must be appointed to overwhelm many of the potential pitfalls that creep around within OPC Registration and to understand the requirement in detail. Hence, to obtain our service for the given procedure:
The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided and the payment is received.
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Answered by our experts
A One Person Company (OPC) is a type of business structure where a single individual can form and operate a company as a separate legal entity. The OPC allows the individual to enjoy the benefits of limited liability and have full control over the company's operations.
No, an OPC can have only one director, who is also the sole shareholder of the company. However, a nominee director must be appointed to take over the company's management in case the sole director is incapacitated.
The registration process for an OPC typically takes around 10-15 days, depending on the completion of documentation and the processing time of the concerned authorities.
Any individual who is an Indian citizen and resident can register a One Person Company. Foreign individuals or entities are generally not eligible to form an OPC.
Yes, an existing sole proprietorship can be converted into an OPC. The sole proprietor can become the sole director and shareholder of the OPC, providing limited liability protection.