Introduction
Recently, the One Person Company (OPC) was introduced as successful refining over the sole proprietorship. In OPC, a single promoter assumes full control over the company while restricting his / her liability towards their contributions to the company. The said person will then be the sole shareholder and director (although a nominee director is present, but has zero control unless the actual director proves incapable of entering into the contract).
Under section 2 (62) of the company act 2013, One Person Company means a company incorporated under the company’s act 2013 having only one person as a member. It is a new form of business which is came into existence through companies act in the year 2013. It is the form of business having separate legal entities form its promoter just like other forms of company. The main advantage of OPC form of company is that there can be only one member with whom the company can get incorporated while a minimum of two members is required for incorporating and maintaining a private limited company or seven-member are required for incorporating and maintaining a public limited company.
Through this form of a business single person alone can operate a corporate entity with limited liability protection; an OPC does have a few limitations.
Under this form of company, the member needs to compulsory nominate one person as his/her as nominee for incorporating the company and that nominee will give his/her consent under form INC-3 for becoming the nominee of such person.
Why One Person Company
âž² East way to jump into the corporate world
Private Limited Company form of business is an easy and simple way to get into the corporate world and it is an easy way for a good start-up. As compare to Sole Proprietorship, it is a better option for the start-up as in this form of business liability of the member is limited. It is a good platform for incorporating a company form of business having ownership.
âž² Business credibility
If a business is established as a proprietorship or partnership, it is not registered with the Ministry of Corporate Affairs and cannot be found in the databases of the online company or LLP. Often there is no reliable evidence of the existence of the company, making it difficult to open a bank account, acquire trustworthy clients, or receive credit from vendors.
âž² No Minimum Capital Required
As per the point of view of incorporation, there is no minimum capital required for incorporating a private limited company. As per company law 2013, you can start a private limited company with 0 paid-up capital. Whereas if you want to incorporate a public limited company you need to have 5 Lakh as minimum paid-up capital
âž² Liability is Limited
Limited Liability means the status of being legally responsible for a company's debts only to a limited sum. Like proprietorships and partnerships, the Member's responsibility for the company's debts is limited in a limited liability company. In other words, the responsibility of a company's members is limited only to the sum of the face value of the shares they take over.
One Person Company incorporations process:
âž² Apply for name
The first step in incorporating a company is for reserving the name of the proposed company in part-A of SPICe Plus (SPICe+) form. In this form choose your business activity and file for two proposed names, if CRC will reject the proposed name then file again with two new names within a certain time limit from the date of rejection (15 days).
âž² Apply for DSC
The next step is to apply for DSC (Digital Signature Certificate) which will be used for signing the forms by proposed directors and proposed members respectively. Procure DSC for both proposed directors and member, if both are different.
âž² Fill the SPICe plus Form (SPICe+)
Once, your name gets reserved under it will be valid for 20 days from the date of approval, within 20 days you have to fill-up the form and upload it online.SPICe+ is an advanced form combination of 8 forms in one. Through this proposed company can apply for at once:
- Name reservation
- Incorporation
- Apply for DIN
- TAN
- PAN
- EPFO
- ESIC
- GSTIN
- INC-9
Next step is to fill the part-B of SPICe + which will contain all the detail related to incorporating company like number total number of directors and members, Authorized share capital, paid-up capital, number of share hold by members, company registered address detail, directors and member detail and will required attachments for proof. Then draft the MOA (memorandum of association)-INC-33 and AOA (Article of Association)- INC-34 of the proposed company, Nominee Form- INC-3 then fill form required for EPFO and ESIC registration with detail, then Fill the AGILE form for procuring GSTIN. After filling all these attach the signature and then upload it on MCA website
Documents required for Incorporating One Person Company is as follow:
- PAN card
- Photograph
- Aadhar card
âž² ID proof of proposed Director and member (anyone):
- Passport
- Voter’s ID
- Driving License
âž² Address proof of proposed member and Nominee (anyone):
- Telephone bill
- Mobile Bill
- Bank statement
- Electricity bill
âž² Address proof for the principal place of business of the proposed company (anyone)
- Utility bill like telephone bill, electricity bill, gas bill, water bill
- Rent agreement with rent slip
- Proof of ownership
FAQs
Q. What is a person's company?
A. Under section 2 (62) of the company act 2013, One Person Company means a company incorporated under the company’s act 2013 having only one person as a member. It is a new form of business which is came into existence through the company's activities in the year 2013. It is a form of business having a separate legal entities from its promoter just like other forms of company. The main advantage of the OPC form of company is that there can be only one member with whom the company can get incorporated
Q. Pre-requisite for incorporating a private limited company?
A. As per company act 2013 for incorporating a private limited company there is a minimum requirement of:
Minimum number of director-1
Minimum number of shareholder-1
Minimum paid-up capital- 0 (although minimum capital should be there so that bank account can be open)
Q. Documents required for incorporating a company?
A. ID proof of proposed Directors and members:
i. PAN card (Mandatory)
ii. Aadhar card (Mandatory)
iii. Photograph of the proposed director (mandatory)
iv. Passport or Voter’s ID or Driving License
B. Address proof of proposed members and directors (any one of the following):
i. Telephone bill
ii. Mobile Bill
iii. Bank statement
iv. Electricity bill
C. Address proof for the principal place of business of the proposed company (any one of the following)
i. Utility bill like telephone bill, electricity bill, gas bill, water bill
ii. Rent agreement with rent slip
iii. Proof of ownership
Q. Government fees for incorporating a company?
A. Government fee varies from state to state as the stamp duty varies from state to state as per state stamp act depending upon the authorized capital of the proposed company.