The Significance and Applicability of One Person Company
The structure of the One Person Company (OPC)was launched as a refinement of the structure of a sole proprietorship firm. In a One person company, a single promoter gains full authority over the company thereby, restricting his liability towards their contributions to the enterprise. Hence the said person will be the sole shareholder and director. Section 2 (62) of Company Act defines a one person Company as a company that has only one person as to its members. Infact members of a company are nothing but subscribers to its memorandum of Association, or its shareholders. So and OPC is a company that has only one shareholder as its member. We at Accounting4you will make you aware of the whole process in a nutshell.
Sole Proprietorship is the oldest and easiest Business structure to start in India. A Sole proprietorship provides maximum privacy to its owners and has an easy establishment and operational process. In a sole proprietorship company or in a single person business, the company is owned, managed and controlled by one person, who is the proprietor. A sole proprietorship company cannot have other partners or shareholders. There is only one shareholder.
The membership in One Person companies are for only natural persons who are Indian citizens and residents are eligible to form a one person company in India. The documents required for OPC membership are the Pan card or Passport. Passport is required for NRI’S and foreign nationals. Scanned transcript of driver’s licence or voter’s ID, Updated gas or electricity bill, bank account statement, mobile or landline phone bill. The specimen signature or impression and finally a passport size photo. For a sole proprietorship business, registration is not required as it is identified through alternate registrations such as GST registrations. These arfe things you get to know more once you visit us at Accounting4you.
If you are single person and have a long term growth and expansion plans for a single person business, then the One Person Company is the best option for you. The OPC Company registration in India is entirely online. In one Person Company only one member is there and hence it is a one man show Company, whatever the decisions he or she takes there are ultimate. He or she need not require discussing with other shareholders as only one shareholder will be there in the Company.
The Director of the Company can be the employee of the Company. He can give his own premises on rent / leave to Company and collect rent from it. He can give loan to the company and can take loan from the company, he can also supply goods or services to the Company and get consideration for that.
A unique feature of OPCs that is segregates it from other kinds of companies is that the sole member of the company has to mention a nominee while registering the company. OPCs enjoy various privileges and exemptions under the Companies Act that other kinds of companies do not possess.
Sole Proprietorship come to an end with the death of the proprietor. As an OPC company has a separate legal identity, it would pass on to the nominee director and therefore continue to exist. This does not happen in any other companies as they follow the concept of perpetual succession.