What is one person company?

The Companies Act, 2013 come with new concept of One Person Company, Now an individual can do the business singly. According to the section 2 clause 62 of the companies Act, 2013, One Person Company means a company has only one person as member.

Who can be the member of OPC?
Only a natural person who is resident in India

Following are the benefits of OPC:

1. MinimumRequirements:

  • Minimum 1 Shareholder
  • Minimum 1 Director
  • The director and shareholder can be the same person
  • Minimum 1 Nominee
  • Letters ‘OPC’ to be suffixed with the name of OPCs to distinguish it from other companies

2. Easy funding:

As it is legal entity, OPC get the loans or funding from NBFC or banks etc.

3. Independent Existence:

The One Person Company is considered as a separate legal entity and authorized to excise all the functions like private limited except NBFC function.

 4. Limited Liability:

In an OPC, there is only one member who holds its entire shares so  he/she has the liability to the extent he/she has invested in the business.

5. Separate Property:

An OPC will have its own separate property as it gains its own identity and functions as a separate legal entity. The One person company  itself become the owner of its assets, and the members have not any rights on such property.

 7. Transferability of Shares:

Transfer of shares is not allowed in the one person company because transferring of shares changes the complete structure of the company.

8. Tax Flexibility and Savings: Directors remuneration, rent, interest etc are deductible expenses which brings down the taxable income of the business.

 9. Complete Control of the Company with the Single Owner:

10. OPC is completely controlled and managed by the Single Owner.

11. Legal Status and Social Recognition for Your Business:Large organizations prefer to deal with private limited companies instead of proprietorship firms. Thus it helps to retain them 

Following are the exemptions under companies act, 2013:

(a) Sign on annual returns

(b) Hold Annual General Meetings and Board Meetings

(c) Sign on Financial Statements

(d) Option to dispense with the requirement of holding an AGM.

(e) The power of Tribunal to call meetings of members.

(f) Calling of an extraordinary general meeting.

(g) Notice of meeting

(h) Statement to be annexed to notice.

(i) The quorum for meetings.

(j) Chairman of meetings.

(k) Proxies

(l) Restriction on voting rights.

(m) Voting by show of hands.

(n) Voting through electronic means.

(o) Demand for the poll.

(q) Postal ballot.

(r) Circulation of members’ resolution.

What is the process of incorporation?

For the ease MCA has introduced a new linked form AGILE for GST and ESIC registration ( Its optional). We can get PAN, TAN, GST and ESIC at the time of incorporation.

Following are the basic mandatory compliance that an OPC needs to observe?

a. At least one Board Meeting in each half of calendar year and time gap between the two Board Meetings should not be less than 90 days. 

b. Maintenance of proper books of accounts.

c. Statutory audit of Financial Statements.

d. Filing of business income tax return every year before 30th September .

e. Filing of Financial Statements in Form AOC-4 and ROC Annual return in Form MGT 7.

Is there any specific exemption under income tax?

No , there is no specific exemption under income tax act.

Following are the documents required:

Pan card
Residential proof
Utility bill
Registered office proof
Email ID
Mobile Number

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