One person company was a recent introduction made by the Companies Act, 2013. An OPC is generally preferred by entrepreneurs who have just ventured into their business as there is only one founder or promoter for the business. An OPC also comes with a lot of benefits.
Nominee of the Shareholder – The Shareholder shall nominate another person who shall become the member and shall be entitled to all the shares along with with the liabilities to bear of the company in case of death/incapacity of the original shareholder.
*Only a person who is an Indian citizen and resident of India shall be a nominee for the sole member of a One Person Company.
Features of a One Person Company
Read through some of the general features of a One Person Company
Single-member- Unlike other private companies, an OPC will have only one member or a shareholder.
Nominee – This is one of the unique features of the OPC where it stands out from most other business entities. The sole member of the company has to mention the name of the nominee at the time of registration.
Absence of a perpetual successor – Since an OPC has only one member, the death of the member will result in the nominee taking a call on whether to choose or reject the position of the sole member.
One director – A One Person Company may have the only director, unlike other companies where a minimum of 15 directors are allowed.
Paid-up Capital – There is no minimum amount of paid-up capital for a one-person company.
What are the privileges of an OPC?
- Annual meetings are not a mandatory protocol
- Cash flow statements do not have to be included in their financial statements.
- The rules regarding an independent director do not apply to an OPC.
- Rules in regards to meetings and quorums do not apply to them
- The remuneration paid to the directors is more when compared to the other business entities.
- They also enjoy several exemptions and tax benefits under the Companies Act, 2013.
Basic requirements for One Person Company Registration
- Only one person as a member / Shareholder.
- One nominee for the Shareholder
- DSC (Digital Signature Certificate)
An OPC was recently introduced in the Companies Act, 2013. Although it may seem similar to a sole proprietorship business firm, an OPC and a sole proprietorship are different. An OPC also enjoys many benefits under the Companies Act, 2013.
If you have an idea of starting an OPC and wondering how to get your registration done, get in touch with our staff. Call us at +91-9900328729, +91-80-40909797. We also handle business advisory and financial advisory services as well.