The Companies Act of 2013 introduced the novel concept of an OPC (One Person Company) in India. This was mostly done to help people who are ready and able to start their own company. An individual can establish a single economic entity using this model. According to the Companies Acts’ Section 2(62) definition, a “One Person Company” is a company with only one member.
Members of a company are typically shareholders or those who have subscribed to the memorandum of association. As a result, in keeping with this understanding, an OPC is a company that only has one shareholder as a member. Most of the time, these companies start with just one founder or promoter, like entrepreneurs whose companies are still in their infancy.
Due to the numerous advantages that OPCs provide, these company owners now prefer OPCs to the sole proprietorship model. The fact that an OPC is a distinct legal entity from its promoter is one of its greatest advantages. As a result, it has its own assets and liabilities, implying that the promoter does not have to personally pay the company’s debts.
Who is eligible for OPC registration in Chennai?
Rule 3 of the Companies (Incorporation) Rules, 2014 states that
- only a natural person can form an OPC in India,
- and only if the natural person is a Major,
- Reasonable Indian Citizen,
- Resident in India can have OPC registration in Chennai, and
- Not a member of any other OPC.
Registration process
OPC registration in Chennai follows the process as below.
There must be one shareholder.
- One director (a shareholder may serve as director) and one nominee are required. The nominee’s consent is required for OPC registration in Chennai.
- Make an application for a DIN, or Directors Identification Number.
- Obtain a certificate of digital signature. Most of the time, the DSCs have a one-year or two-year validity. These can be renewed at the end of the initial issue period.
- You have to decide on your company’s name for OPC registration in Chennai. In order to distinguish your organization from other companies, OPC will be added after the name.
- The Certificate of Incorporation is the final step. It’s a legal document with information about your company on it. Certification of incorporation is provided by the Indian government.
The characteristics of a one-person company
OPC registration in Chennai has the following characteristics.
- A one-person company only has one shareholder or director.
- It’s simple to start the company, and fun things are easy to find.
- One person would be in charge of the entire company, making it simple to handle all company-related issues.
- Encourage companies of a smaller size when OPC registration in Chennai is obtained.
- Benefits of tax freedom of operation Limited liability Cash flow statement is not required for a one-person company. OPC Borrowing Capacity is a separate legal entity, so there are no minimum regulations or compliance requirements.
Legal meaning of OPC
After the Companies Act of 2013, a one-person company had its establishment. According to the earlier act of 1956, the term had no meaning prior to this. Only the 2013 version of the Act mentioned all of the prerequisites for starting an OPC and OPC registration in Chennai.
The most common abbreviation for such businesses was OPC. In contrast to other kinds of businesses, where multiple directors are necessary, these kinds of businesses only allow one person to serve as a director. The sole director of the business is also a shareholder and a member of the company.
The OPC that has OPC registration in Chennai has the status of a separate legal entity and the advantages of a sole proprietary business under the Companies Act of 2013. A shareholder in the one-person business only has a certain amount of rights and obligations.
The OPC member has protection in a different way than a PLC or LLP member. According to the Act of 2013, the legal meaning of the OPC that has OPC registration in Chennai is an entity whose member and director are the same person. As a result, an individual is in charge of running these businesses.
In most PLCs, the directors manage the day-to-day operations on the company’s behalf. However, shareholders hold the majority of the decision-making authority in these businesses.
However, the shareholder and director of OPC which has OPC registration in Chennai are the same person, and he alone is accountable for all decisions.
Regulation norms
The Ministry of Corporate Affairs serves as OPCs’ primary regulatory body, just like other registered companies do.
The company’s Registrar of Companies (RoC) is in charge of all compliance and regulatory matters. In accordance with the Companies Act 2013’s provisions, RoC is in charge of these businesses.
Compliance norms
The company must comply with the following compliance requirements in order to maintain its registration, which have the outline in the Act.
- Similar to other registered entities, the company must hold its annual board meetings.
- The OPC that has OPC registration in Chennai must submit its Income Tax Returns each year.
- It ought to file the Tax Deducted at Source (TDS) as well, just like the income tax.
- The OPCs are also necessary to submit their Annual Financial Statements, just like the other organizations listed in the RoC. Form AOC-4 should have the usage of submission the statement.
- OPC that has OPC registration in Chennai should submit annual returns with MGT-7.
- Adhering to the clause requiring the company to undergo a statutory audit conducted by a designated Chartered Accountant.
- Filing your taxes at a standard rate of 25%.
- If the OPC distributes its profits to shareholders, it should also submit a Dividend Distribution Tax.
- The OPC’s Tax Deducted at Source (TDS) returns ought to have submission quarterly.
- For an OPC with more than ten employees, ESI registration is necessary.
Benefits of One Person Company
OPC registration in Chennai has the following benefits.
Separate legal entity
Having the Status of a Separate Legal Entity is one of the most significant advantages of OPC registration in Chennai.
Prior to the Companies Act’s 2013 enactment, this was impossible. The director or shareholder of the business has the authority to act on their own due to their separate legal status.
Limited liability
The applicability of the limited liability principle is an additional benefit and may be the primary reason that people choose OPC registration in Chennai. The meaning of the term is the shareholder’s or director’s maximum liability up to a certain point.
As a result, the director’s personal assets cannot have the claim by the company’s creditors in the event of a debt dispute.
Requirement of sole director
The OPC’s most notable feature is the requirement for sole directors. Through OPCs that has OPC registration in Chennai in the Indian market, the idea of a single director and member became a reality. To comply with the requirements of the Companies Act of 2013, the burden of recruiting additional directors for the company’s board should have removal as a result.
Public companies do not have to have Independent Directors or executive directors appointed to their boards of directors. The director is the only individual authorized to oversee the company’s affairs, including the shareholder.
Easier compliance
Norms for compliance are simpler than for a Pvt. OPCs’ compliance requirements are somewhat simpler than those of a public limited company or limited liability company. Also, meeting these standards takes a lot less time. The Act reduces even the amount of paperwork required for its processes.
Increased Transparency
As a result of these companies’ simpler compliance requirements, there has been an increase in business transparency. This is because the OPC which has OPC registration in Chennai faces fewer obstacles when completing all compliance-related tasks. Due to their small size, even the government can easily inspect their operations.
No disputes
There is no room for disagreements in organizations like public limited companies, partnership firms, and private limited companies. There are many points and people involved, and disagreements between multiple administrators and directors could lead to disputes.
Aside from that, shareholders make all major decisions, which may result in disagreements between shareholders and directors. The OPC that has OPC registration in Chennai, on the other hand, has a single person making all decisions, so there are no chances of disagreements.
Benefits to MSME Industries
Registering as an OPC that has OPC registration in Chennai provides advantages to the MSMEs industry. Everyone is aware that rural economies are thriving as a result of MSMEs.
Due to their legal status, businesses can easily provide these services with the OPC registration in Chennai because they will face fewer restrictions.
Additionally, opportunities to obtain financing from public sector businesses or other financial institutions are provided by registration’s legal status.
Additionally, due to the company’s limited liability, the director is spared.
Conclusion
A good government-backed startup is one person’s company of India for small company owners. This is the simplest method for starting your own company. This is the concept that is necessary to provide a significant boost to the nation’s corporatization.
The primary concern should be to avoid administrative ambiguity, similar to the ones that stymied the growth of Limited Liability Partnerships in this country. In general, the guidelines for a single person’s company have been very sensible.
One Person Companies are helping immensely in extending the overall economy of India. Entrepreneurs are setting up shop in greater numbers than ever before.
It is more useful because no outside intervention is visible. One-person companies also benefit from adhering to the same set of requirements as other limited liability companies.
OPC relies on a progression of model determinations to convey open network through open measures in modern intelligence and project frameworks.
