ONE PERSON COMPANY REGISTRATION (OPC)
With the implementation of the Companies Act, 2013, a single person could constitute a Company, under the One Person Company (OPC) concept.
The introduction of OPC in the legal system is a move that would encourage corporatization of micro businesses and entrepreneurship. Government Constituted committee had suggested that such an entity may be provided with a simpler legal regime through exemptions so that the State whether the small entrepreneur is not compelled to devote considerable time, energy and resources on complex legal compliance. OPC is a one shareholder corporate entity, where legal and financial liability is limited to the company only.
Difference between a Sole Proprietorship and an OPC ( Sole Proprietorship Vs OPC)
The Basic difference between a sole proprietorship and an OPC is the way liability is treated in the latter. A one-person company is different from a sole proprietorship because it is a separate legal entity that distinguishes between the promoter and the company. The promoter’s liability is limited in an OPC in the event of a default or legal issues. On the other hand, in sole proprietorships, the liability is not restricted and extends to the individual and his or her entire assets.
What is an OPC ( One Person Company)?
As per section 2(62) of the Companies Act, 2013, “One Person Company” means a company which has only one person as a member
The Companies Act, 2013 classifies companies on the basis of their number of members into One Person Company, private company, and public company.
As stated above, a private company requires a minimum of 2 members. In other words, a One Person Company is a kind of private company having only one member.
One person company shall have a minimum of one director. Therefore, a One Person Company will be registered as a private company with one member and one director.
Section 3(1)(c) lays down that a company may be formed for any lawful purpose by one person, where the company to be formed is to be One Person Company, that is to say, a private company. In other words, one person company is a kind of private company.
Advantages of One Person Company
The concept of One person company is quite revolutionary. It gives the individual entrepreneurs all the benefits of a company, which means they will get credit, bank loans, access to market, limited liability, and legal protection available to companies.
Prior to the new Companies Act, 2013 coming into effect, at least two shareholders were required to start a company. But now the concept of One Person Company (OPC) would provide tremendous opportunities for small businessmen and traders, now the OPC would help them do business as an enterprise and give them an opportunity to start their own ventures with a formal business structure,
Further, the amount of compliance by a one person company is much lesser in terms of filing returns, balance sheets, audit etc. The new concept would also boost the confidence of small entrepreneurs.
FOR ANY ASSISTANCE ON ONE PERSON COMPANY REGISTRATION CONTACT VIRTUAL AUDITOR SUPPORT TEAM, WE WILL HELP YOU WITH GETTING THE STATUS OF COMPANY CHANGED TO DORMANT CONTACT US @ [email protected]