What is a One Person Company(OPC) and how is it different from an ordinary private limited company?
One Person Company is a new type of business entity. A private limited company can be formed with a minimum of two directors and shareholders. The directors and shareholders can be same individuals. One person company does away with the requirement of minimum two shareholders. It allows a single entrepreneur to get his business registered as a company and get limited liability protection.
Who can register for an OPC?
OPC company registration can be done only by Indian residents, and that, too, only one at a time, as per the specifications of the Ministry of Corporate Affairs.
What is the minimum capital requirement to start an OPC?
An OPC can be started with a minimum authorised capital of Rs. 1 lakh. There is no mandatory requirement for a minimum paid up capital. Hence, you can start as an OPC with a capital contribution as low as Rs. 2. However when the paid up capital exceeds Rs. 50 lakh, OPC must mandatorily convert to a private limited company( pvt. ltd.). Also, when the average turnover for 3 consecutive years becomes Rs. 2 crore or more, there is a need to convert into a pvt. ltd.
Is there any tax advantage on forming an OPC?
There is no specific tax advantage to an OPC over any other form. The tax rate is flat 30%, other tax provisions like MAT & Dividend Distribution Tax applies as they apply to any other form of company.
What are the mandatory compliance that an OPC needs to observe?
The basic mandatory compliance are:
Maintenance of proper books of accounts
Statutory audit of Financial Statements
Filing of business Income tax return every year before 30th Sep
Filing Annual ROC return which includes form MGT-7 - Statement of Disclosure of ShareHolders and Directors
What is the eligibility criteria for a member of OPC?
A natural person who is resident in India and Indian Citizen who is living in India for a period of 182 Days is eligible to act as a member and nominee of an OPC A person can be only being a member of one OPC. If a person becomes a member or nominee of 2 or more than 2 OPC’s then he has to withdraw his membership from the OPC within 182 days.
Do I need to be physically present during this process?
The Ministry of Corporate Affairs (MCA) has made the new OPC registration a completely online process. All the document flow happens in electronic form and there is no need of any physical presence.
My details on my documents have a difference. Can I still incorporate my company using them?
You will need to have exactly the same details on all your documents to incorporate your company.
How many directors can there by in an OPC?
An OPC has certain limitations. The person starting the business is its only director and shareholder. There is also a nominee director, but this person has no power whatsoever for raising equity funds or offer employee stock options. The nominee exists only to take over in case of the death or incapacitation of the director. The nominee is chosen by the director, and can be anyone, such as your spouse, parents or siblings. The nominee will need to provide identity proof during registration.
Can I start more than one OPC at a time?
No, an individual can form only one OPC at a time. This rule applies to the nominee in an OPC, too