About One Person Company (OPC), a new concept has been introduce in the Companies Act 2013. In a private company, at least 2 directors and 2 members are require while in a public company, at least 3 directors and at least 7 members are require. A single person could not previously include the company.
One Person Company registration in Chennai (OPC) is a company own by one person. Prior to the implementation of the Companies Act, 2011, not a single person could establish a company.
If a person want to set up his own business, he could only choose sole proprietorship as there should be at least two directors and two members to set up a company.
According to Section 2 (62) of the Companies Act, 2013, a company can be form with only 1 director and 1 member. It is a form of a company compliance requirements are lower than a private company.
The Companies Act, 2011 provides that a person can form a company with a single member and a director. The director and the member can be the same person.
Legal status
Obtains the status of a separate legal entity from the OPC member. The OPC’s separate legal entity protects the individual who has included it. The liability of the member is limited to his / her share, and he / she is not personally responsible for the loss of the company. Thus, creditors can sue the OPC, not the member or director.
Easy to get money
As OPC is a private company, it is easy to raise funds through venture capitals, angel investors, incubators, etc.
Banks and financial institutions prefer to lend to a company rather than a proprietorship company. Thus, it becomes easy to get money.
Low compliance
The Companies Act, 2013 provides certain exemptions to OPC in respect of compliance. The OPC does not need to prepare a cash flow statement. The company secretary is not require to sign the books of accounts and annual returns and is only sign by the director.
Easy insertion
It is easy to include OPC as a single member and only one nominee is required for its insertion. The member may also be a director. The minimum authorize capital for inclusion of OPC is Rs.1 lakh, but there is no minimum capital requirement. Thus, it is easier to incorporate it than other forms of company.
Easy to manage
A single person can set up and run an OPC, making it easier to manage. Decisions are easy to make, and the decision-making process is fast. General and special resolutions can be easily enter into the minute book by the member and signed by the sole member. Thus, the company is easy to operate and manage as there will be no contradictions or delays in the company.
Permanent succession
The OPC has a permanent successor facility even when there is only one member. When involving the OPC, a single-member nominee needs to be appoint. After the death of the member, the nominee will run the company in place of the member.
Procedure of OPC
Step 1: Apply for DSC
The first step is to obtain the Digital Signature Certificate in Chennai will be “ABC (OPC) Pvt. Ltd.”
There are 2 options available for obtaining name recognition using MCA’s RUN web service by applying in Form Spicy 32 or giving only 1 select name with the importance of having that name. However, with effect from March 23, 2018, the Ministry has decide to approve two propose names and one RFB, reserving unique names (RUN service) for companies.
Once the name is approve by the MCA we move on to the next step.
Step 4: Documents required
We need to prepare the following documents that need to be submit to the ROC:
Memorandum of Association (MOA) which will be follow by the company or the business for which the company will be involved.
The Articles of Association (AOA) are the by-laws outline below on which the Company will operate.
As there is only 1 director and member, a nominee has to be appoint on behalf of such person as if he becomes incapacitated or dies and is unable to perform his duty he will perform on behalf of the director and take his place. Their consent will be take along with their PAN card and Aadhaar card in Form INC-3.
Proof of registered office fee of the proposed along with proof of ownership and NOC from the owner.
Declaration and consent of the proposed Director of Forms INC-9 and DIR-2 respectively.
A declaration by professional certification that all have been comply with.
Step 5: Fill out the form with MCA
All these documents will be attach with the Spicy Form, Spicy-MOA and Spicy-AO to the Director and DSC of the professional and will be upload on the MCA site for approval. Page number and TN are generate automatically at the time of inclusion. No separate application is require to obtain page number and TAN.
Step 6: Issue certificate of installation
Upon verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and we will be able to start our business.