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BASIC CONCEPT OF OPC

The Companies Act, 2013 introduced concept of One Person Company (OPC), which was not in existence in Companies Act, 1956, to facilitate those enterprenuers who can start their business themselves. OPC is form of Private Company. In case of Private Company, atleast two members are required to start and maintain their Company but in case of OPC a single person can start his/her business in form of Company.
Forming OPC is best suitable for those who are single owner of their business and running business in small or medium scale. Every OPC shall nominate a nominee in a MOA and AOA of the Company, who will become a member of OPC in case of death or incapacity of Single Member.

It is to be noted that status of OPC sustain only if both criteria fulfilled by OPC i.e

  • Paid up Capital upto INR 50 Lakh ; OR
  • Average turnover upto INR 2 Crores.

  • Exceeding either of above criteria will lead to automatic conversion of OPC into Private Limited Company by following procedure as prescribed by the Companies Act. Hence decision of doing business in form of OPC must be keeping in view of above criterias and expected scale of business.





    WHY OPC

    All One Person Company incorporated in India is covered under Companies Act, 2013 and Ministry of Corporate Affairs, power delegated to Registrar of Companies, is regulatory authority of all OPC incorporated in India .
    All Proprietors/single person who were doing their small/medium scale businesses in form of Proprietorship but were not getting privileges provided to private limited companies, forming One Person Company is all solution for them.
    It is preferred form of business among small and medium size entrepreneurs due to its many advantages as under:

    Single Member:

    Unlike Private Companies, only one person can form OPC.

    Limited Liability :

    Liability of Member of OPC is limited like other form of Company. Member of OPC will not incur personal liability unlike proprietorship.

    No minimum capital requirements:

    A single person can start their OPC with minimum capital as no minimum capital criteria is required by law.

    Separate legal Entity:

    Like other form of Company, OPC also has Separate Legal Entity. So the Member and OPC are distinct from each other.

    Regulatory Authority:

    OPC is regulated by Ministry of Corporates Affairs (MCA), power delegated to Registrar of Companies (ROC), unlike entrepreneurs which is unregulated entity.

    Best for Small and Medium Entrepreneurs:

    OPC is best suitable for small and medium entrepreneurs keeping in view criteria as mentioned above. OPC shall enjoy all privileges as provided to Private Companies.

    Greater Credibility:

    As an OPC needs to have its books audited annually, it has the greater credibility among the vendors and the lending institution.





    WHAT ARE PRE-REQUISITES TO GET OPC REGISTER

    One Person and one Nominee required :

    Member of OPC shall nominate one nominee, who will become a Member in case of his/her death or incapacity.

    Member must be resident Indian:

    Only a natural person who is Indian Citizen and resident in India can incorporate OPC. Resident in India means a person who had resided in India for a period not lesser than 182 days in the prior calendar year.

    DIN:

    Proposed Director(s) must have Director Identification Number

    Digital Signature:

    All Partners must have digital signature.

    Registered Office:

    Address Proof for the registered office.





    WHAT ARE THE NECESSARY INFORMATION & DOCUMENTS TO GET OPC REGISTER


    Information

    Proposed Name:

    Proposed Name of OPC must not be similar or identical to any other Company or LLP.

    Object of LLP:

    Object/business to be conducted in proposed OPC must be Legal.

    Capital:

    Minimum capital contribution to be contributed by Member.

    Registered office address.

    Address of registered office of OPC.



    Documents

    Photograph:

    Passport-sized photograph of proposed director/Member and Nominee .

    PAN Card:

    a copy of the PAN of proposed director/Member and Nominee.

    Aadhaar Card:

    a copy of the aadhaar card of proposed director/Member and Nominee.

    Identity Proof:

    Any on Proof of Identity like Voter ID/Driving Licencense/Passport of proposed director/Member and Nominee.

    Address proof:

    Any one Latest Bank Statement / Electricity bill/Telephone or Mobile Bill (Not older than two months) of proposed director/Member and Nominee.

    Passport:

    In case of NRI or foreign national as a partner): Passport should be notarized or apostilled as applicable by the relevant authorities

    Mobile Number:

    Valid mobile number of proposed director/Member and Nominee.

    E-mail id:

    Valid Email-id of proposed director/Member and Nominee.

    Registered office proof:

    For registered office (i) address proof, electricity bill or any utility bill (not older than 2 months) (ii) duly signed NOC from Owner and (iii) If Rented, Duly notarized rent agreement along with one month receipt.





    HOW TO GET REGISTER OPC

    STEP 1 :

    Apply for Digital Signature Certificate (DSC) of Member.

    STEP 2:

    Finalisation of Name of OPC and drafting of Memorandum of Association (MOA) and Article of Association (AOA) of OPC respectively.

    STEP 3:

    Obtain a written consent of Nominee in Form INC-3 who will undertake the entity after the death or incapacity of former Member.

    STEP 4:

    After finalisation of Name of OPC drafting of MOA & AOA , Preparation and filing of Form Spice+ for Name Approval , DIN application, Incorporation of OPC , Issue PAN & TAN and Opening of Account.

    STEP 5:

    After getting approval of OPC , Certificate of Incorporation will be issued.





    POST INCORPORATION ONE TIME COMPLIANCES

  • Commencement of Business :
  • Once the incorporation certificate is obtained and opening of Bank Account, the Member must deposit the amount mentioned in the MOA of the Company.
    Once, the equity capital is infused into the Bank's current account; the Company can file for the commencement of business with the MCA. Commence of Business certificate must be obtained within 180 days of incorporation in Form INC-20A to avoid a penalty.

  • Intimation of Registered Office address:
  • In case notice of the situation related to registered office was not filed during incorporation, it must be filed within 30 days after incorporation in Form –INC 22.





    ANNUAL COMPLIANCES REQUIREMENTS AFTER THE OPC REGISTRATION

    Every OPC is required to comply with the annual compliance requirements. These compliances are mandatory for all OPC whether they have started their business or not.


    Atleast one Board meeting in each half calendar year

    At least one Board Meeting in each half of the calendar year and the time gap between the two Board Meetings should not be less than 90 days.

    Maintenance of Minutes and Statutory Registers

    Every OPC must maintain its Minutes of each meeting held and statutory registers.

    OPC Annual Return

    Annual Return is required to be filed with the Registrar of companies in Form-MGT-7 .

    Income Tax Return

    After LLP registration, every OPC is required to submit their income tax return by 30th September every year.

    Filing of Audit Financials

    Audit financials is required to be filed with the Registrar of companies in Form-AOC-4 .





    WHAT ARE THE PENALTY PROVISIONS IN CASE OF OPC ANNUAL COMPLIANCE DEFAULT

    According to Companies Act, 2013, it is mandatory to file all Form MGT-7 and AOC-4 annually. There is a provision for per day penalty of INR 100/- of each form in case of any failure in filing of said forms for reporting OPC ’s .

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