Meaning Of One Person Company

According to Section 2(62) of Companies Act, a one-person company is a business entity which has only one individual as its member. Moreover, the company’s members are nothing but either the subscribers to the company’s MOA (memorandum of association) or its shareholders.

Therefore, an OPC can be defined as a company which has a single shareholder as its member.

One Person Company (OPC) registration is a new concept that surpasses the limitations of resources, time and mediums to get more partners for the execution of business plans and enables us to promote the incorporation of micro-businesses & accomplish our entrepreneurial dreams.

OPC can also be considered as the combination of Company and Sole proprietorship. OPC can be registered as a one-person company under Section 2(62) of the Companies Act, 2013 and the rules thereto. The absence of complexities that comes with multiple partners, motivates many people to incorporate an OPC to start their business. Besides, Limited Liability also bolsters the incorporation of OPCs.

Rationale Behind One Person Company

• An individual can easily transform the business idea into a corporate form.
• Limited Liability
• OPC can be solely carried out by the same person.
• Limited resources are adequate in OPC.
• No minimum paid-up share capital under the Companies Act, 2013.
• Perpetual succession

Benefits of One Person Company Registration in Jaipur

• Limited Liability
  Company’s member holds liability to the limit of his share in the company. In an OPC, one person has the complete share and entire authority over the business’s operations. Therefore, the liability of the person is limited to the investment made by him/her.
• Independent Existence
  One Person Company has a separate legal entity and independent existence.
• Less Tax Burden
  In OPC, you can receive remuneration as a director and rent as a lessor. Also, as a creditor, you can advance funds to your commercial entity and earn interest. Rent, Directors’ remuneration and interest are deductible expenses which reduce the profitability of the Company and thus reduces the taxable income of the business entity.
• Quicker Actions
  OPC is entirely ruled and managed by one owner which results in fast decision making and quicker actions.
• No requirement of minimum capital contribution
• Compulsory Audit is required only when the Contribution exceeds 25 lakhs or the Annual Turnover exceeds 40 Lakhs.

Major Condition For Incorporation Of OPC

Person Incorporating an OPC & Nominee of Such OPC Shall Be –

• Natural Person; &
• Indian Citizen; &
• Resident of India

Note– Here A Person Is To Be Called Resident Of India If He Has Stayed In India For A Period Of Not Less Than 182 Days During Immediately Preceding One Calendar Year.

• No Person Shall Be Eligible To Incorporate More Than One OPC.
• No Person Shall Be Eligible To Become Nominee In More Than One Such Company (OPC).
• If A Person Is Already A Member In An OPC, And After This, He Becomes A Member In Another OPC Under His Being A Nominee In That OPC; Then He Shall Make Arrangements Within A Period Of 180 Days For Fulfilling The Condition As Referred In Abovementioned Point No. 2.

Other Provisions Related With One Person Company

• An OPC can be started with a minimum Authorized Capital of Rs. 1 lakh. There is no mandatory requirement for a minimum paid-up capital. Hence, you can start as an OPC with a capital contribution as low as Rs. 2. However, when the paid-up capital exceeds Rs. 50 lakh, OPC must mandatorily convert to a Private Limited Company. Also, when the average turnover for 3 consecutive years becomes Rs. 2 crores or more, there is a need to convert into a Private Limited Company.
• Such a company cannot be incorporated or converted into a Company under Section 8 of the Act.
• Such Company cannot carry out non-banking financial investment activities including investment in securities of any Body Corporate.
• No such company can convert voluntarily into any kind of company unless two years is expired from the date of incorporation of one person company, except the threshold limit (Paid Up Share Capital) is increased beyond fifty lakh rupees or its average annual turnover during the relevant period exceeds Two Crore Rupees.
• Compulsory Conversion of OPC into Private or Public Company: –OPC Shall be required to convert itself, either into a Private Company or a Public Company as per provisions of this Act, within a period of 6 months from the date:-
  • On which it’s paid-up share capital has been increased beyond 50 Lakhs Rupees; or
  • On the last day of the relevant period during which it’s average annual turnover exceeds 2 Crore Rupees;

Note: – “Relevant Period” Means A Period of Immediately 3 Preceding Consecutive Financial Years.

Documents Required For Incorporation Of A One Person Company

Companies Act, 2013 has listed the following requirements for the incorporation of a Pvt. Ltd. company

• Minimum One Directors:
  Member: Member is a person who buys and holds shares in a company having a share capital. They become a member once their name is entered on the register of members. Director: A director is a person who leads or supervises a particular business of a company.
• PAN Card:
  Self-attested PAN Card of Members and Directors.
• Identity Proof of Directors:
  Self-attested ID proof of Members and Directors (Anyone out of the following -Valid Passport/Voter ID/Aadhar Card/Valid Driving License)
• Address Proof of Directors:
  Self-attested Address Proof of Members and Directors and Should Not be Older than 2 Months (Anyone out of the following – Bank Statement/Electricity Bill/Telephone Bill/Mobile Bill)
• Passport Size Photo:
  2-2 Passport Size Colored Photos of Members and Directors.
• Business Address Proof (Owned/Rent/Leased):
  NOC from the Owner of Property/Property Papers (Title Deed)/Utility Bill (Either Electricity Bill or Mobile Bill or Telephone Bill) (Should Not be Older than 2 Months)

Requirement Of Information

• Authorized and Paid-up Share Capital of the Proposed Company. Explanation: A Company can be started with any amount of capital. There is no need for a minimum amount of capital of Rs. 100,000.
• Place of Birth and Duration of Stay of Sole Member, Nominee and Director at Present Residential Address.
• Occupation of Sole Member, Nominee and Director.
• Proposed Object/Business of the Proposed Company.
• Educational Qualification of Sole Member, Nominee and Director.
• Email IDs and Contact Number of Sole Member, Nominee and Director.

Registration Process of One Person Company in Jaipur

The Ministry of Corporate Affairs vides its notification dated 18th February 2020 effective from 23rd February 2020 has further amended the Companies (Incorporation) Rules, 2014 thereby substituting the old Form INC-32 (SPICe) with web service SPICe+ along with certain other amendments.