Benefits of One Person Company One person

company is corporatization of sole proprietorship, so it has all benefits will a corporate enjoys aside to this it has some relaxations in provision of company law. Following are some of benefits of One Person Company.

• It has separate legal entity.
• The liability of shareholder/ director is limited
• The organized version of OPC will open the avenues for more favorable banking facilities Legal status and social recognition for your business. It gives suppliers and customers a sense of confidence in business.
• The director and shareholder can be same person
• On the death/disability company can be succeed by nominee.
• Exemption available from various provisions under Company law.

Advantages Of OPC

Legal status

The OPC receives a separate legal entity status from the member. The separate legal entity of the OPC gives protection to the single individual who has incorporated it. The liability of the member is limited to his/her shares, and he/she is not personally liable for the loss of the company. Thus, the creditors can sue the OPC and not the member or director.

Easy to obtain funds

Since OPC is a private company, it is easy to go for fundraising through venture capitals, angel investors, incubators etc. The Banks and the Financial Institutions prefer to grant loans to a company rather than a proprietorship firm. Thus, it becomes easy to obtain funds.

Less compliances

The Companies Act, 2013 provides certain exemptions to the OPC with relation to compliances. The OPC need not prepare the cash flow statement. The company secretary need not sign the books of accounts and annual returns and be signed only by the director.

Easy incorporation

It is easy to incorporate OPC as only one member and one nominee is required for its incorporation. The member can be the director also. The minimum authorised capital for incorporating OPC is Rs.1 lakh but there is no minimum paid-up capital requirement. Thus, it is easy to incorporate as compared to the other forms of company.

Easy to manage

Since a single person can establish and run the OPC, it becomes easy to manage its affairs. It is easy to make decisions, and the decision-making process is quick. The ordinary and special resolutions can be passed by the member easily by entering them into the minute book and signed by the sole member. Thus, running and managing the company is easy as there won't be any conflict or delay within the company

Perpetual succession

The OPC has the feature of perpetual succession even when there is only one member. While incorporating the OPC, the single-member needs to appoint a nominee. Upon the member's death, the nominee will run the company in the member's place.

One Person Company (OPC) Registration Process

Step 1: Apply for DSC

The first step is to obtain the Digital Signature Certificate (DSC) of the proposed Director which required the following documents:

• Address proof
• Aadhaar card
• PAN card
• Photo
• Email Id
• Phone number

Step 2: Apply for DIN

Once the Digital Signature Certificate (DSC) is made, the next step is to apply for the Director Identification Number (DIN) of the proposed Director in SPICe+ Form along with the name and the address proof of the director. Form DIR-3 is the option only available for existing companies. It means with effect from January 2018, the applicant need not file Form DIR-3 separately. Now DIN can be applied within the SPICe+ form for up to three directors.

Step 3: Name Approval Application

The next step while incorporating an OPC is to decide on the name of the Company. The name of the Company will be in the form of “ABC (OPC) Private Limited”.

The name can be approved in the Form SPICe+ 32 application. Only one preferred name along with the significance of keeping that name can be given in the Form SPICe+ 32 application. If the name gets rejected, another name can be submitted by applying another Form SPICe+ 32 application.

Once the name is approved by the MCA we move on to the next step.

Step 4: Documents Required

We have to prepare the following documents which are required to be submitted to the ROC:

The Memorandum of Association (MoA) which are the objects to be followed by the Company or stating the business for which the company is going to be incorporated.

The Articles of the Association (AoA) lays down the by-laws on which the company will operate.

Since there are only 1 Director and a member, a nominee on behalf of such a person has to be appointed because in case he becomes incapacitated or dies and cannot perform his duties the nominee will perform on behalf of the director and take his place. His consent in Form INC - 3 will be taken along with his PAN card and Aadhar Card.

Proof of the Registered office of the proposed Company along with the proof of ownership and a NOC from the owner.

Declaration and Consent of the proposed Director of Form INC -9 and DIR - 2 respectively. A declaration by the professional certifying that all compliances have been made.

Step 5: Filing of Forms With MCA

All these documents will be attached to the SPICe+ Form, SPICe-MOA and SPICe-AOA along with the DSC of the Director and the professional, and will be uploaded to the MCA site for approval. The Pan Number and TAN is generated automatically at the time of incorporation of the Company. There is no need to file separate applications for obtaining PAN Number and TAN.

Step 6: Issue of the Certificate of Incorporation

On verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and we can commence our business.

Checklist For Registering OPC

• Minimum and Maximum of one member.
• A nominee should be appointed before incorporation.
• Consent of the nominee should be obtained in Form INC-3.
• The name of the OPC must be selected as per the provisions of the Companies (Incorporation Rules) 2014.
• Minimum authorised capital of Rs.1 lakh.
• DSC of the proposed director.
• Proof of registered office of the OPC.

Timelines for OPC Registration

The DSC and DIN of the proposed directors can be obtained in 1 day. The Certificate of Incorporation of an OPC is obtained in 3-5 days. The whole incorporation process of an OPC takes approximately 10 days, subject to departmental approval and revert from the respective department.