OPC Registration
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The Companies Act, 2013 introduced a new kind of Company called One Person Company (OPC). An OPC is like a regular company with benefits like limited liability and being treated as a separate legal entity.
A single individual could not establish a business prior to the Companies Act of 2013. A sole proprietorship was the only legal form of business ownership available to new entrepreneurs. This was due to the need that a business to be formed with a minimum of two directors and two members.
For a Private Company, there needed to be at least two directors and two members. For a Public Company, there needed to be at least three directors and seven members. Before, a single person couldn't create a Company.
But according to Section 2(62) of the Companies Act 2013, a company can now be made with just one director and one member. The director and member can be the same person. Compared to a private firm, an OPC has less regulations to follow.
In India, an OPC may be formed as per the Companies Act of 2013. This law establishes the guidelines for establishing and running a one-person business in the country.
Following are the benefits of choosing to incorporate an LLP in India:
The One Person Company (OPC) has its own legal identity separate from its member. This protects the individual who started the company. The member's liability is limited to their shares and they are not responsible in personal capacity for the company's losses. This means that creditors can only take legal action against the OPC and not the member or director.
An OPC can more easily receive money from sources like venture capitalists, angel investors and incubators because it is seen as a private corporation. A business is more likely to receive a loan from a bank or financial institution than is a sole proprietorship. This makes acquiring funding for an OPC simpler.
The Companies Act, 2013 provides certain exemptions and reduced compliance requirements for OPCs. For example, the OPC is not required to prepare a cash flow statement and the company secretary does not need to sign the accounts books and annual returns. These tasks can be handled by the director alone.
Incorporating an OPC is easy as it only requires one member and one nominee. The member can also act as the director. While there is a minimum authorised capital requirement of Rs. 1 lakh, there is no minimum paid-up capital requirement. This makes the incorporation process simpler compared to other types of companies.
Since a single person can establish and manage the OPC, it is easier to handle its affairs. Decision-making is quicker and resolutions can be passed easily by the member.
The compliance requirements for OPCs are significantly less compared to other types of companies. This makes the registration process easier with minimal paperwork.
OPCs can avail the benefits offered to small-scale industries. These benefits include easy funding without collateral security up to certain limits, lower interest rate loans and privileges under the foreign trade policy. These advantages contribute to the progress and development of the OPC in its early stages.
Even though just one member comprises an OPC, it enjoys the feature of perpetual succession. The member needs to appoint a nominee during incorporation. When the member dies, the nominee will take over and run the company.
The following are the essentials to incorporate an OPC in India:
Following documents are essential to register an OPC:
The registration charges for an OPC depend on several factors, with the quantity of money allocated as the company's share capital as the primary factor.
The government levies a fixed fee of Rs. 2,000 in cases where the nominal share capital is less than Rs. 10 lakhs. There is an additional cost of Rs. 200 for every extra Rs. 10,000 in share capital up to Rs. 50 lakhs. To encourage entrepreneurship, the government has waived off the incorporation fee.
The registration fee includes obtaining the DIN (Director Identification Number) and DSC (Digital Signature Certificate) for the directors of the company, as well as stamp duties that vary depending on the state where the OPC is being registered. It also includes filing various forms and documents.
No matter what form of company you are registering for, whether it is an OPC or another kind, it is always advisable to get the advice of professionals. Consequently, a professional fee will be charged for their services. This is a means to make an investment to guarantee the OPC's legal and efficient registration. The professional fee depends on the complexity of the task and other factors.
StartupFino, with its team of trained professionals, assists you not only through the registration process but also in post registration compliances as well.
Following are the steps to register a OPC in India:
Step 1: Get a Digital Signature Certificate (DSC).
Step 2: Apply for Director Identification Number (DIN).
Step 3: Decide on a name and request Ministry of Corporate Affairs (MCA) permission.
Step 4: Write and sign the articles of association (AOA) and memorandum of association (MOA).
Step 5: Compile all required documentation and submit it, in addition to the registration cost and stamp duty.
Step 6: Fill out and submit the application forms to the MCA for review and approval.
Step 7: Receive the certificate of establishment or incorporation.
The Companies Act of 2013 has certain rules that need to be followed by companies within specific deadlines. The Registrar of Companies, shareholders, directors, investors and tax agencies are just a few of the stakeholders who are protected by these standards, which promote openness, good governance and accountability. These regulations can be broken down into four main groups: annual compliances, frequent compliances, compliances based on events and one-time compliances following incorporation.
The basic mandatory compliances include:
The taxation rules that apply to a one person company (OPC) are as follows:
One Person Companies have gained much popularity since they were introduced in 2008. While forming an OPC, certain requirements and compliances must be adhered to in order to make the incorporation and subsequent functioning effective.
StartupFino is a company that specialises in offering complete services for OPCs. We can help you with everything from providing advice in the initial phase to ensuring that you meet all the necessary requirements, while also keeping your OPC in good legal standing.
Our services include the following:
In addition to fulfilling the formalities mentioned above, StartupFino also offers pre-establishment and post-establishment one person company services.
By using our OPC services, entrepreneurs can avoid the negative outcomes that come from not following the rules. We work hard to provide services that are prompt and effective, so you can manage your business without any issues and without facing penalties or problems.
StartupFino manages legal, financial & Compliance services through its team of professionals with the help our own technology.
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