Imagine that you have an amazing idea of business, a single man with humble resources want to leverage the advantages of forming a trend setting company. Is there anything beyond sole-proprietorship?

The answer is a big yes. Here comes the Companies Act 2013 with revolutionary concept of One Person Company (OPC). The concept of OPC is not new, it was introduced since a very long time back in UK and European countries it was and recommended by JJ Irani committee in the year 2005.

For those enthusiastic entrepreneurs who aspire to form an organized business, OPC brings in platter new bracket of opportunities with relatively less stringent or simple legal regime. The benefits are:

1. A single person could constitute a Company.
2. Transformation through corporatization of micro businesses.
3. Simpler legal regime with whole host of exemptions

A GLANCE AT THE DEFINITION OF OPC UNDER THE COMPANIES ACT, 2013:

It is defined under section 2(62) of the Companies Act, 2013.

“One Person Company” means a company which has only one person as a

Member”

Here is the opportunity to register an OPC as a Private Company with just 1 member and 1 director (both same) with a nominee. It may be formed as a Company limited by shares/guarantee or an unlimited liability company.

LET US SEE, WHO CAN FORM AN OPC

Only a natural person who is an Indian citizen and resident in India is eligible to incorporate an OPC or be a nominee of it.

Hi Minors, no chance for you! You need to wait to become major to become a member or a nominee.

WHY SHOULD YOU GO FOR CORPORATIZATION (THE OPC FORM)

Few of the benefits are:

1. Better Credibility : More avenues to access credits, bank loans,
2. Limited liability,
3. Legal protection for business,
4. Better access to market

DO YOU KNOW?

The first OPC in India was incorporated on 28th April 2014 at Delhi under ROC- Delhi jurisdiction, the company name being, ‘Vijay Corporate Solutions OPC Pvt Ltd’

However, there are also some restriction and terms imposed on an OPC to make this concept more meaningful.

RESTRICTIONS TO OPC

1. Do you want to convert OPC later on into a Section 8 Company? Then, understand that you can never ever do it.
2. Thinking in the area of business “Non-Banking Financial Investment Activities” then, forget OPC. Not allowed.
3. You are an NRI. Forgive us you cannot incorporate OPC.

THE RELAXATIONS AVAILABLE TO OPC

1. You need not have to get confused with Cash Flow Statement! Cash Flow      Statement is not required.