What is OPC?
Opc, A one person company was recently launch for sole proprietorship reform. In the sole promoter acquires full rights over the company, thus limiting his / her liability for their contribution to the enterprise. Therefore, said the person will be the sole shareholder and director (however, the director nominee is present, but has zero power until the actual director proves unable to come to an agreement).
Also, the employee may have no opportunity to contribute to stock options or equity funding. In addition, if an company has an average hat trick turnover of Rs. 2 crore or paid up fund received or Rs. Lakh 0 lakh and above, it has to be convert into a private limited company or a public limited company within six months.
What is the eligibility to act as member in OPC?
Only a natural person who is an Indian citizen and a resident of India will be eligible to act as a member and nominee of an One person Company. The term “resident in India” means a person who has immediately stayed in India for a period of less than 182 days during the previous financial year.
Process to obtain OPC
- Check company name availability by filing INC-1 form.
- File form INC-2 for inclusion of OPC within 60 days of filling INC-1 form.
- In case of addresses, the INC-2 file correspondence and the registered office are not the same within 10 days of registration of the INC-2 form.
Benefits of OPC in small business
It provides credibility to the business of financial institutions, suppliers and potential customers. When companies are trust more than other forms of business, it is easier to get loans on favorable terms from banks that reassure potential customers when entering into deals.
Is it compulsory to appoint nominee for OPC?
Yes, in the form INC-consent it is mandatory to determine the name of the person at the time of insertion, with his prior consent. A nominee is a person who, in the event of a member’s death or inability to enter into a contract, will become a member of the OPC. The nominee may also withdraw the consent at any time by giving notice to the member and the One person Company
Why OPC is prefer over other forms of the company?
Yes, it is mandatory to determine a person’s name with his or her prior consent when entering the INC-consent form. A nominee is a person who, in the event of a member’s death or inability to enter into a contract, will become a member of the OPC. The nominee can withdraw consent at any time by giving notice to the member and the OPC.
Is funding for OPC is problem?
Funding is not a problem in OPC.
Can NRI become member of OPC?
In terms of Companies Rule 3 (Incorporation) Rules, 2014, only. A natural person who is an Indian citizen and a resident of India is eligible for inclusion in the OPC. Therefore, a non-resident cannot become a member or nominee of an OPC. For the purpose of this rule, the term “resident in India” means a person who has lived in India for less than one hundred and eighty two days during a calendar year.
What are the privileges available for OPC?
Here are some of the privileges and benefits associated with OPC:
OPC will provide start-up entrepreneurs with new business Idea.
OPC provides an outlet for entrepreneurial impulse Professionals.
The benefits of limited liability. The most significant reason for including shareholders in a ‘single-person company’ is certainly the desire for limited liability.
OPC ownership is not a concern; therefore, they offer dual company entity as well as individual, guard.
Personal against any difficulties of responsibilities. This is the basic difference between OPC and sole proprietorship.
What are the rates of taxation apply to OPC?
Since the concept of one-person company was recently introduced by there are currently no specific tax laws available for OPCs in India, and hence, these OPCs have been place in the same tax bracket as private limited companies. Again, in general, there are no tax-related benefits available to OPCs in India, although some industry-specific benefits may be available from time to time. Therefore, the following methods and rates apply to OPCs in India:
Corporate income tax: 30% of gross income / net profit
Surcharge: 5% of such income, if it is more than one crore
Education Cess: 3% of total income tax and surcharge
Dividend Distribution Tax (DDT): 15%
Finally, the provisions of the Minimum Alternative Tax (MAT) also apply.
What are the eligibilities for OPC?
Of course, there are rules that need to be follow to open a company in India. We know that starting a new company in India has always been a hassle and OPC is no exception. You need to satisfy a few criteria before you can be tag as an eligible person to open a one person company. This section outlines the eligibility conditions for the same. The terms are:
The person planning to open a one person company should be a natural citizen of India and also a resident of India. Simply put, she or she should be born not only in India but also in India. If this condition is not satisfy, no one will be able to open the OPC.
Again, only a person who is a natural citizen of India and is also a resident of India, the OPC thus constituted. No it can be nominate as a nominee.
Compliances of OPC
Compared to a private company, a one-person company is like a sub-domain of a private company with fewer board meetings, an annual general meeting, and some other exemptions in compliance.
What are the divisions of OPC?
The One person Company can be form as one of the two:
- Limited by guarantee
- Limited by shares
If the shares limit the One person company, it must have an internal capital of at least Rs 1 lakh and have the power to restrict share transfers. It will also not be allow to invite people to subscribe.
The One person company registration in Chennai must have a legally registered name under which it operates and the term; One person must refer to the company where the company name is used.
The member must nominate another with consent and file the name of the nominee with the Registrar of Companies.
This nominee will run the One person company, if the founding member dies or is found in some exceptional circumstances.