One person company (OPC)
In the Company Act of 2013, a new concept known as the One Person Company was introduced (OPC). A minimum of two directors and two members are necessary in a private company, whereas a minimum of three directors and seven members are required in a public company. Previously, a single person could not form a corporation.
What is One Person Company?
A one-person company (OPC) is a business formed by a single individual. A single person could not form a business prior to the implementation of the Companies Act of 2013. If a person wished to start a business, he or she could only do so as a sole proprietorship because forming a company required a minimum of two directors and members.
A company can be founded with just one director and one member, according to section 2(62) of the Company Act 2013. It is a type of corporation with fewer compliance obligations than a private corporation.
According to the Companies Act of 2013, an individual can start a business with just one member and one director. It is possible for the director and member to be the same individual. As a result, a one-person company means that a single individual, whether a resident or an NRI, can form a business that combines the qualities of a corporation with the advantages of a sole proprietorship.
OPC registration process:
Step 1: Apply for DSC
The first step is to obtain the suggested Director’s Digital Signature Certificate (DSC), which requires the following documents:
- Address proof
- Photo
- Email ID
- Aadhaar card
- PAN card
- Phone number
- The Memorandum of Association (MOA) outlines the company’s goals and objectives as well as the business for which it will be incorporated.
- The Articles of Association (AoA) establishes the company’s operating procedures.
- Since there is only one director and one member, a nominee on behalf of such a person must be nominated so that if he becomes incompetent or dies and is unable to discharge his obligations, the nominee will act in his place. Along with his PAN card and Aadhaar card, his consent in Form INC-3 would be taken.
- Proof of the proposed Company’s registered office, as well as proof of ownership and a letter of authorization from the owner.
- Forms INC-9 and DIR-2 are used to declare and consent to the prospective Director.
- Easy formation
- Separate legal entity
- Access to funds
- Less compliance
- No requirement of board or general meeting
- Quick decision making
- Suitable for small firms
- Lack of expertise
- Ownership and management