One Person Company

The Companies Act, 2013 introduced the concept of One Person Company (OPC) in India. It allows a single person to start and activate a company on his/her own, without the need for a co-founder or partner. Here are some key features of an OPC under the Companies Act, 2013:

Solo Shareholder : An OPC can have only one shareholder, who is also the director of the company. This allows for complete control over the business and executive-making.

Limited Liability : The Liability of the shareholder is Limited to the extent of the unpaid subscription money in his/her name. In case of any financial or legal obligations, the personal assets of the shareholder are not at risk.

Separate Legal Entity : An OPC is a separate legal entity from its owner, which means that it can hold assets, enter into contracts, and sue or be sued in its own name.

Nominee : The shareholder of an OPC is required to nominate a person who will take over the management of the company in case of his/her death or incapacitation.

Minimum and Maximum Capital : An OPC must have a minimum authorized capital of Rs. 1 Lakh and there is no maximum limit. Also, an OPC cannot issue any shares or convert itself into any other type of company until it completes two years from the date of its incorporation.

Overall, the concept of OPC has made it easier for individuals to start their own business without the need for partners or co-founders. It provides a separate legal entity and limited liability to the shareholder, which gives them the flexibility to manage and grow their business.

Disadvantages of Incorporating a OPC :

Limited Growth Potential : No such company can convert voluntarily into any kind of company unless two years is expired from the date of incorporation of One Person Company, except threshold limit (paid up share capital) is increased beyond fifty lakh rupees or its average annual turnover during the relevant period exceeds two crore rupees.

Incorporating a one-person company has its advantages and disadvantages. While it is the simplest and cheapest way to start a business, it also comes with some drawbacks. One of the main disadvantages of incorporating a one-person company is that there is no legal separation between the owner and the business. This means that if something goes wrong, the owner will be personally liable for any debts or losses incurred by the business. Furthermore, registering as a one-person company can also be time consuming as there are extra steps involved in company registration such as filing accounts and annual returns.

Another disadvantage is that as a one-person company, you will have limited resources and expertise in terms of managing your business operations. You will need to take on all of the responsibilities yourself which can be overwhelming if you don't have prior experience in running a business. Finally, as a single owner it can be difficult to secure funding from outside sources such as venture capitalists or banks since they prefer larger companies with multiple owners.

Documents to be submitted by Director & Nominee

Setting up a one-person company is a great way to start a business and become an entrepreneur. However, there are certain documents that need to be submitted when incorporating such a company. These documents include the Director & Nominee forms which must be completed and submitted as part of the incorporation process.
Documents to be submitted by Director & Nominee

  • PAN Card (Compulsorily)
  • Voter’s ID/Passport/Driver’s License (Only any One as ID Proof)
  • Copy of Latest Bank Statement (not older than 2 months old, to be used as Address Proof)
  • Telephone or Mobile Bill/Electricity or Gas Bill (Utility bills) (to be used as Address Proof)
  • Passport-size photograph (Soft copy)
  • Copy of Specimen signature (Document shall be shared by us, and to be signed Directors Only)

NOTE: In case of Having a Valid DIN by the Directors only PAN and Adhaar is sufficient, it is only for Indian Resident Directors.

  • Self-attestation must be done by any one of the directors for the first three documents.
  • For the foreign nationals, apostilled or notarized copy of the passport has to be submitted mandatorily. All documents submitted should be valid.
  • All the documents must be notarised (if NRI is currently in India or a Commonwealth country). All the documents must be notarised and apostille or attested by an Indian embassy (if in a non-Commonwealth country)

Documents regarding registered office

  • copy of Latest Electricity or Water Bill
  • copy of rental agreement Notarized in English
  • copy of No-objection certificate from the property owner
  • copy of sale deed/property deed in English (in case of owned property)
 
     
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