One Person Company

OPC AND ITS ADVANTAGES

• Only a single person is required to integrate with OPC, which is the most important benefit as only person is needed to take the decisions, responsibility, managing affairs and controlling.
• As it is Registered as a business organization it can enjoy the same benefits as that of a Private Limited Company, which make it familiar among many financial institutions.
• OPC provide loans at smaller interest rate.
• Unlike proprietorship, director's salary will be deducted under income tax law
• OPC provide a great encouragement to the upcoming entrepreneurs who are looking forward towards new start-ups. Since OPC is having only few responsibilities therefore entrepreneurs can take more risk without giving stressing the loss of assets.
• No annual general meetings are required, Resolution signed by the director is entered in the book which is sufficient.
• Cash flow statement such as balance sheets, cash flow statement, changes in equity statement etc are not required.

ADVANTAGES OF INTEGRATING WITH AN OPC

• -it is observed as a separate legal entity
• -the accountability of the members is finite.
• -handiness of share through
• - It allows easy handling of tax and savings
• -All the right of the company is owned by an individual owner.
• -it gives high legal standard as well as recognition for the business.

Documents Required for Conversion

• The directors of the company should be given a declaration by an affidavit that confirms that all the members and directors are have provided their consent for the conversion.
• The list of members and the creditors
• The recently audited Balance sheets and the profit and loss accounts
• A copy of the NOC of secured creditors

Few documents are required for filling INC 22, they are,

1. Rent agreement along with the rent receipts or lease deed.
2. Utility bills (within 2 months)
3. Any evidence showing the company can use the address of registered office.

Documents needed for the Conversion

1. The affidavit should give a declaration to the directors of the company that ensures that all the members of the company agree for the conversion of OPC to Private Limited Company.
2. List contains details of the members and the creditors.
3. Profit and loss account details and also the balance sheets which are recently inspected.
4. NOC of secured creditors.

REGISTRATION PROCESS FOR ONE PERSON COMPANY IN INDIA

Knowledge is always a gain. So before coming to the registration process, let's see about the types of company. Depending upon the number of people involved it can be classified as follows

• One Person Company- for single person
• Private Limited Company- for two or more people
• Public Limited Company-for seven or more people Entrepreneurs who are interested to register at OPC should also know about its limits so as to make sure you are eligible for it as per the Company Act.
• LLP like legal responsibility cannot Integrate OPV
• A nominee must be given by the promoter during the integration.
• No financial activities is incorporated with OPC
• OPC must be cannot to a Private Limited Company when its paid-up share exceeds more than 50 lakhs and turnover crosses 2 crore.
• No minor member is allowed.
• One person cannot incorporate with more than one OPC.

STEPS FOR THE CONVERSATION PROCESS

If the conversation process is not done within the given period of time, the OPC or any another office of OPC has to pay an amount of Rs 5000 as fine, if it is further extended the amount will be increased by Rs 500 for each day.

1. ANNOUNCEMENT OF REGISTRAR

   Announcement of Registrar, who is concerned with the conversation of the company is necessary. the conversion is done virtue of paid-up capital having exceeded threshold limit.

2. BOARD RESOLUTION

   Several meetings have to be conducted to fulfil the conversion requirements, such as increasing the paid-up capital, the number of shareholders, appointment of director etc.

   Two shareholders and two directors are mandatory.

3. APPLICATION PROCESS FOR CONVERSION

   When all the above-mentioned steps are completed, an application in the required format has to be submitted by the OPC to the registrar. A special resolution should also share by the shareholders and filing of the Form MGT-14 is mandatory with 30 days of special resolution. Further steps include verification and approval of the application and the required documents by the registrar. Finally, a fresh Incorporation certificate is issued by the registrar which implies the conversation of One person Company to Private Limited Company.

Recent Updates

Parliament Passes Law For The Formation Of One-Person Companies

18 November 2020

After Commerce Minister, Tipu Munshi, pushed the ‘Companies (2nd Amendment) Bill, 2020’ to the parliament, it was approved and passed with a provision for the formation of ‘One-Person Companies’. This will pave the way for more investments, and improve company rankings for global ease of doing business. As per the newly-passed bill, the company’s owner and shareholder shall be a single person.

30th March: Companies (Amendment) Bill, 2020

Section 446B of the Act has been amended. The monetary penalty has been reduced for start-up, one Person Company, producer, and small companies. This will facilitate ease of doing business.