One person company is one type of private limited company. This company is run by single person, it means there is only one shareholder in the company. The sole shareholder can even be sole director of the company. This means, there needs to be only one director (minimum) in the company at the time of formation. Earlier , minimum capital requirement was of Rs. 100000. But now the Indian government has removed this requirement.
One person company is same in all respect to two or more than two persons company except that it (opc) can do bussiness only upto Rs. 2 crores per company. And the time it crosses this limit, it need to be company into two or more than two persons company.
THE ADVANTAGES OF REGISTRATION OF ONE PERSON COMPANY:
Limited Liability Protection to Directors and Shareholder
All unfortunate events in business are not always under an entrepreneur’s control; hence it is important to secure the personal assets of the owner, if the business lands up in crises.
Legal Status And Social Recognition For Your Business
One Person Company is a Private Limited Structure, this is the most popular business structure in the world. Gives suppliers and customers a sense of confidence in business. Large organizations prefer to deal with private limited companies instead of proprietorship firms.
Pvt. Ltd. business structure enjoys corporate status in society which helps the entrepreneur to attract quality workforce and helps to retain them by giving corporate designations, like directorship. These designations cannot be used by proprietorship firms.
Complete Control Of The Company With The Single Owner
This leads to fast decision making and execution. Yet he/she can appoint as many as 15 directors in the OPC for administrative functions, without giving any share to them.
Helps for Testing of business model and enables Funding
The OPC business helps Startup Entrepreneurs to easily test the business model, a prototype and upon building a marketable product approach Angel investors, Venture capitalists for funding and easily convert into multi shareholder Private Limited company.
Easy to Get Loan from Banks
Banking and financial institutions prefer to lend money to the company rather than proprietary firms. In most of the situations Banks insist the entrepreneurs to convert their firm into a Private Limited company before sanctioning funds. So it is better to register your startup as a One Person private limited rather than proprietary firm.
Tax Flexibility and Savings
In an OPC, it is possible for a company to make a valid contract with its shareholder or directors. This means as a director you can receive remuneration, as a lessor you can receive rent, as a creditor you can lend money to your own company and earn interest. Directors’ remuneration, rent and interest are deductible expenses which reduces the profitability of the Company and ultimately brings down taxable income of your business.
Easy To Manage and Freedom Compliances
OPC is one of the easiest forms of corporate entities to manage. Very few ROC filing is to be filed with the Registrar of Companies (ROC). No need to conduct Annual General Meeting (AGM)
|1.||Minimum 1 Shareholder|
|2.||Minimum 1 Director|
|3.||The director and shareholder can be same person|
|4.||Minimum 1 Nominee|
|5.||Minimum Share Capital shall be Rs. 1 Lac (INR One Lac)|
|6.||DIN (Director Identification Number) for all the Directors|
|7.||DSC (Digital Signature Certificate) for all the Directors|
|1.||Names of proposed Company (Maximum 6 names can be given)|
|2.||Xerox of pan and voter id of two persons.|
|3.||Copy of Bank current bank statement or Electricity bills issued in name of two persons|
|4.||Address proof of registered office|
|5.||Copy of Lease/ Rent agreement if office of LLP is on rent along with rent receipts|
|6.||3 Passport size photos of all applicants|
|7.||Details of activities and objectives of proposed company|
This article is written by: ACS Prince Kunal
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