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What is One Person Company (OPC) Registration?
Posted on: 20/Aug/2019 5:48:39 PM
What is One Person Company (OPC) Registration?
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The One Person Company (OPC) in recent times was launched as a good refinement over the sole proprietorship. In OPC, a single promoter gains full authority over the company thereby restricting his/her liability towards their contributions to the enterprise. Therefore, the said person will be the sole shareholder and director (however, a director nominee is present, but has zero power until the real director proves incapable of getting into the contract). Also, there can be no opportunity for contributing to employee stock options or equity funding. Additionally, if an OPC has an average hattrick turnover of Rs. 2 crores and over or acquires a paid-up fund of Rs. 50 lakh and over, it has to be converted to a private limited company or public limited company within six months.
DOCUMENTS NECESSARY FOR THE REGISTERED OFFICE
- Scanned transcript of Current Bank Account Statement/Phone or Mobile Invoice/Gas or Electricity Invoice)
- Scanned transcript of Rental Agreement written in the English language
- Scanned transcript of N-O or No-objection Certificate from the concerned property landowner
- Scanned transcript of Property or Sale Deed printed in English (if the property is owned)
FAQs:
Why should I form an OPC?
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An OPC is a good alternative to running a sole proprietorship, largely because it gives limited liability to the business owner. This means that your liability is limited to the amount you’ve invested in the business; business debts cannot be recovered from personal possessions. Also, a sole proprietorship ceases to exist on the death of its promoter. In the case of an OPC, the nominee director takes over and the entity continues to exist. Single entrepreneurs who do not have another partner to start a private limited company may also consider it.
Who can register an OPC?
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Only Indian residents can register an OPCs, and that, too, only one at a time, as per the specifications of the Ministry of Corporate Affairs.
What are the mandatory requirements of an OPC?
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All such businesses must maintain books of accounts, comply with statutory audit requirements and submit income tax returns and annual filings with the RoC.
How much capital is required to start an OPC?
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Therere is no difference in capital requirement between an OPC and a private limited company. It needs an authorised capital of Rs. 1 lakh to begin with, but none of this actually needs to be paid-up. This means that you don’t really need to invest any money into the business.
What are the tax advantages available to an OPC?
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No general advantages; though some industry-specific advantages are available. Tax is to be paid at flat rate of 30% on profits, Dividend Distribution Tax applies, as does Minimum Alternate Tax.
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