OPC is a relatively new form of registration introduced in India’s legal system. As it’s new, not many people have a clear idea about its features and benefits. So to make things easier for you, I am here with a complete explanation about OPC and its features.
Let’s begin with understanding what OPC is.
What is OPC or One Person Company?
OPC is the latest Company structure that was incorporated by the Companies Act 2013 in India. It is a structure where just a single person is the promoter or founder of the company. It is a perfect choice for the entrepreneurs and business owners who are in the starting phase of their business.
There is only one Shareholder in OPC who control all the business activities of the company. He/she will be the sole owner and decision-maker. That person will incur all the profit and losses.
The Shareholder nominates a person as a member of the OPC. This Member will be bear all the liabilities, rights and shares in case of death or any other incident where the Shareholder is incapable of discharging his/her duty.
OPC registration offers a lot of benefits to businesses in multiple ways. Let’s take a look at them.
Benefits of OPC
- Appointing an independent director is not mandatory for an OPC
- Unlike another form of Companies where annual meetings are required, there is no need for such agreements in OPC
- There is no need to include Cash flow statement with Financial Statements.
- The directors are entitled to more remuneration as compared to their peers in other forms of registrations.
- Apart from this, the Directors are entitled to various tax exemptions and benefits under Companies Act 2013.
What are the minimum necessities to establish an OPC?
You will need the following documents to establish an OPC.
- One Shareholder and all of his/her documents
- One Member and all of his/her documents
- Documents for the principal place of business.
- Digital Signature Certificate
It is important to note here that the Shareholder can nominate only an Indian citizen as the Member of the OPC.
Some important terms related to an OPC
- Director
Director will be a person in an OPC who will take all the crucial decision for the business.
Unlike other company registrations where multiple directors are needed, an OPC can have just one director.
- Nominee
He/she will be an Indian citizen, nominated by the Single Shareholder. He will be responsible for the decision making tasks in case of death or incapability of the Single Shareholder to discharge duties.
- Single Member
OPC will have just a single member, unlike other registrations that can have multiple members.
- No continuous succession
Private Limited Companies have a succession procedure. There is no such compulsion in OPCs as the Nominee has the authority, either to continue the business or shut it down.
- Paid-up Capital
For an OPC, you won’t need a minimum amount of paid-up capital. For other registration, a minimum amount is mandatory in the form of paid-up capital.
Footnote
Overall, an OPC is an excellent option for those who are new to the business and struggle to find partners. You can choose OPC and can avail the benefits of a Company with minimum Legal Compliances.
People often get confused between One Person Company (OPC) and Sole Proprietorship as there are some similarities. But, in fact, there is a vast difference between both of them and you
can read about it here.
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