The Companies Act, 2013 completely revolutionized corporate laws in India by introducing several new concepts that did not exist previously. On such game-changer was the introduction of One Person Company concept. This led to the recognition of a completely new way of starting businesses that accorded flexibility which a company form of entity can offer, while also providing the protection of limited liability that sole proprietorship or partnerships lacked.
Section 2(62) of Companies Act defines a one-person company as a company that has only one person as to its member. Furthermore, members of a company are nothing but subscribers to its memorandum of association, or its shareholders. So, an OPC is effectively a company that has only one shareholder as its member.
Such companies are generally created when there is only one founder/promoter for the business. Entrepreneurs whose businesses lie in early stages prefer to create OPCs instead of sole proprietorship business because of the several advantages that OPCs offer.
Advantage of OPC
- Separate Legal Entity
- EASY FUNDING
- Limited Liability
- Minimum Requirement like 1 director, 1 Shareholder, and 1 nominee (Shareholder and director may be same)
- Single owner
- Rating in credit
- No interference from any third party is seen
- OPC requires less compliance’s as compare to private & public limited.
- Benefit in Income Tax
Documents Required
- Copy of Aadhaar Card/ Voter identity card
- Copy of PAN Card of partners
- Passport size photo of partners
- Proof of business address(Electricity/ Water bill of Business Place)
- Copy of Sale/Property Deed (If owned property)
Process
- Document submission
- Obtain a unique Digital Signature Certificate
- Reserve a Name for the Company
- Apply for Director Identification Number(DIN)
- MOA , AOA & corporate documents submission
- Get Certificate of Incorporation
- Apply for PAN, TAN and Bank account