THE ADVANTAGES OF REGISTRATION OF ONE PERSON COMPANY:
One Person Company (OPC) Private Limited has many advantages as compared to Proprietorship firm.
Limited Liability Protection to Directors and Shareholder
All unfortunate events in business are not always under an entrepreneur’s control; hence it is important to secure the personal assets of the owner, if the business lands up in crises.
While doing business as a proprietorship firm, the personal assets of the proprietor can be at risk in the event of failure, but this is not the case for a One Person Private Limited Company, as the shareholder liability is limited to his shareholding. This means any loss or debts which is purely of business nature will not impact, personal savings or wealth of an entrepreneur.
Legal Status And Social Recognition For Your Business
One Person Company is a Private Limited Structure, this is the most popular business structure in the world. Gives suppliers and customers a sense of confidence in business. Large organizations prefer to deal with private limited companies instead of proprietorship firms.
Pvt. Ltd. business structure enjoys corporate status in society which helps the entrepreneur to attract quality workforce and helps to retain them by giving corporate designations, like directorship. These designations cannot be used by proprietorship firms.
Complete Control Of The Company With The Single Owner
This leads to fast decision making and execution. Yet he/she can appoint as many as 15 directors in the OPC for administrative functions, without giving any share to them.
Helps for Testing of business model and enables Funding
The OPC business helps Startup Entrepreneurs to easily test the business model, a prototype and upon building a marketable product approach Angel investors, Venture capitalists for funding and easily convert into multi shareholder Private Limited company.
Easy to Get Loan from Banks
Banking and financial institutions prefer to lend money to the company rather than proprietary firms. In most of the situations Banks insist the entrepreneurs to convert their firm into a Private Limited company before sanctioning funds. So it is better to register your startup as a One Person private limited rather than proprietary firm.
Tax Flexibility and Savings
In an OPC, it is possible for a company to make a valid contract with its shareholder or directors. This means as a director you can receive remuneration, as a lessor you can receive rent, as a creditor you can lend money to your own company and earn interest. Directors’ remuneration, rent and interest are deductible expenses which reduces the profitability of the Company and ultimately brings down taxable income of your business.
Easy To Manage and Freedom Compliances
OPC is one of the easiest forms of corporate entities to manage. Very few ROC filing is to be filed with the Registrar of Companies (ROC). No need to conduct Annual General Meeting (AGM)
MINIMUM REQUIRMENTS
| 1. |
Minimum 1 Shareholder |
| 2. |
Minimum 1 Director |
| 3. |
The director and shareholder can be same person |
| 4. |
Minimum 1 Nominee |
| 5. |
Minimum Share Capital shall be Rs. 1 Lac (INR One Lac) |
| 6. |
DIN (Director Identification Number) for all the Directors |
| 7. |
DSC (Digital Signature Certificate) for all the Directors |
PROCEDURE/STEPS IN INCORPORATION OF ONE PERSON COMPANY:
STEP NO. |
STEPS |
Time Frame
(Working Days) |
1 |
Preliminary Documentation
- Discussion between MBS Team & Promoters
- Ascertaining document requirement and availability
- Preparation of signing documents by MBS
- Signing of the Incorporation documents by promoter
- Purchasing the stamp papers and notarization of the documents by the promoters
- Sending the Signed/Notarized document by Promoters to MBS
|
5
(Varies by the response time taken by the Promoters) |
2 |
DIN (Director Identification Number)
Getting DIN for all the directors |
1 |
3 |
DSC (Digital Signature Certificate)
Getting DSC for all the Directors |
1 |
4 |
Preparation of Main Object & Search Name Availability
- Preparation of Main Object by MBS
- The Promoters have to provide atleast 4-6 names in the order of priority
- To make an online search of availability of names as desired by the Promoters
- Confirmation of the draft main object & the final name
|
3
(Varies by the response time taken by the Promoters) |
|
|
|
5 |
Application for Name Availability
Filing of INC 1 with the concerned ROC |
5 |
6 |
Incorporation Process:
- After ROC's approval for name of the Company, filing all the Incorporation documents with the ROC
- Online uploading of e-Forms
- Payment of Registration fees
- Receiving Incorporation Certificate
|
5 |
|
|
|
7 |
Application for Commencement of Business Certificate
- Providing Proof of Subscription Money/Capital paid by Subscriber/shareholder to Company
- Online uploading of e-Form
- Receiving Commencement Certificate form ROC
|
Upon bringing Capital into Company
(Anytime within 6 months of incorporation) |
Documents or information required for One Person Company registration:
| 1. |
Names of proposed Company (Maximum 6 names can be given) |
| 2. |
Xerox of pan and voter id of two persons. |
| 3. |
Copy of Bank current bank statement or Electricity bills issued in name of two persons |
| 4. |
Address proof of registered office |
| 5. |
Copy of Lease/ Rent agreement if office of LLP is on rent along with rent receipts |
| 6. |
3 Passport size photos of all applicants |
| 7. |
Details of activities and objectives of proposed company |
Notes :-
Please Use Resources - List of Documents Required Tab to know about recent documents required for registration.
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