{"id":4949,"date":"2019-06-14T10:31:24","date_gmt":"2019-06-14T05:01:24","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=4949"},"modified":"2019-06-20T11:58:12","modified_gmt":"2019-06-20T06:28:12","slug":"why-you-should-start-an-one-person-company-features-reasons-process","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/","title":{"rendered":"Why you should start an One Person Company: Features, Reasons, Process"},"content":{"rendered":"\n<p class=\"has-drop-cap\">One Person Company (OPC) came into existence with the\nsole purpose of encouraging the entrepreneurs to start their own company as a\nsingle owner. But you must not confuse it with the Sole Proprietorship. <\/p>\n\n\n\n<p>The fundamental difference between One Person Company and Sole Proprietorship lies in terms of the liability. OPCs have <a href=\"https:\/\/swaritadvisors.com\/limited-liability-partnership\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"limited liability (opens in a new tab)\">limited liability<\/a>, whereas, in a proprietorship business, the liability extends to proprietor\u2019s personal assets. <\/p>\n\n\n\n<p>Hence, it would be wiser to choose to <a href=\"https:\/\/swaritadvisors.com\/one-person-company\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"start an OPC (opens in a new tab)\">start an OPC<\/a> instead of opting for a sole proprietorship. Apart from this, there are numerous reasons why you should choose One Person Company over others. Let\u2019s discuss several aspects related to OPCs in details-<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3482043a9f2\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3482043a9f2\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#What_is_One_Person_Company\" title=\"What\nis One Person Company?\">What\nis One Person Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#Features_of_One_Person_Company_in_India\" title=\"Features\nof One Person Company in India\">Features\nof One Person Company in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#Reasons_why_startups_should_start_as_an_OPC\" title=\"Reasons\nwhy startups should start as an OPC \">Reasons\nwhy startups should start as an OPC <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#Difference_between_an_OPC_and_Sole_Proprietorship\" title=\"Difference\nbetween an OPC and Sole Proprietorship \">Difference\nbetween an OPC and Sole Proprietorship <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#How_to_Start_an_OPC_in_India\" title=\"How\nto Start an OPC in India?\">How\nto Start an OPC in India?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#Step_1_Apply_for_DSC_Digital_Signature_Certificate\" title=\"Step\n1: Apply for DSC (Digital Signature Certificate)\">Step\n1: Apply for DSC (Digital Signature Certificate)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#Step_2_Companys_name_approval_through_RUN\" title=\"Step\n2: Company\u2019s name approval through RUN\">Step\n2: Company\u2019s name approval through RUN<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#Step_3_File_SPICe_or_INC-32_Form\" title=\"Step\n3: File SPICe or INC-32 Form\">Step\n3: File SPICe or INC-32 Form<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#Step_4_The_Certificate_of_Incorporation_of_an_OPC\" title=\"Step\n4: The Certificate of Incorporation of an OPC\">Step\n4: The Certificate of Incorporation of an OPC<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/why-you-should-start-an-one-person-company-features-reasons-process\/#Concluding_Remarks\" title=\"Concluding Remarks\">Concluding Remarks<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_One_Person_Company\"><\/span>What\nis One Person Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Under Section 2 (62) of the Companies Act, 2013, an\nOPC is defined as a company that consists of only one member. It doesn\u2019t\nrequire any co-founder onboard; instead it lets sole entrepreneurs to start the\nbusiness as Private Limited Company. <\/p>\n\n\n\n<p>Hence, One Person Companies need to comply with every\nprovision as applicable to private companies. This also includes the advantages\nthat private companies get such as limited liability, separate legal identity,\netc. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Features_of_One_Person_Company_in_India\"><\/span>Features\nof One Person Company in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>One person company must have a minimum share capital of Rs. 1 lakh.<\/li><li>According to the Companies Act, 2013, the director of the company should appoint a nominee mandatorily. <\/li><li>Section 149 (1) (a) of the Act states that the company must hold at least one board meeting in every half of the calendar year.<\/li><li>One of the most crucial <a rel=\"noreferrer noopener\" aria-label=\"features of One Person Company (opens in a new tab)\" href=\"https:\/\/swaritadvisors.com\/one-person-company\" target=\"_blank\">features of One Person Company<\/a> is that it has only one member as both the shareholder and as director. <\/li><li>The company is supposed to submit the annual report signed by the Company Secretary (CS). If there\u2019s no CS, then the Director himself is responsible for signing the report. <\/li><li>According to Section 40 of the Act, cash flow statement isn\u2019t essential for filing the company\u2019s financial statement. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reasons_why_startups_should_start_as_an_OPC\"><\/span>Reasons\nwhy startups should start as an OPC <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are plethora of reason why start-ups must choose\nan OPC over sole proprietorship or other business forms. Some of them are as\nfollows:<\/p>\n\n\n\n<ul><li>Limited Liability: In\ncase of any mishappenings, the owner won\u2019t need to incur the loss. Furthermore,\nthere his personal assets won\u2019t be at any risk.<\/li><li>Perpetual Succession:\nEntity will continue its existence irrespective of whatever incidents occur. <\/li><li>Independent Existence:\nEven if the owner dies, the company will continue its existence as there\u2019s a\nnominee. <\/li><li>Separate legal entity:\nOPC is a separate legal entity from its member. <\/li><li>No share transfer: As\nthere\u2019s only member in the company who acts both as the director and\nshareholder of the company, therefore, there can\u2019t be any transfer of shares. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Difference_between_an_OPC_and_Sole_Proprietorship\"><\/span>Difference\nbetween an OPC and Sole Proprietorship <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>One Person Company is completely different from the\nSole Proprietorship business forms. The distinction between the two is as\nfollows: <\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>Features<\/strong>\n  <\/td><td>\n  <strong>One Person\n  Company<\/strong>\n  <\/td><td>\n  <strong>Sole\n  Proprietorship<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>Registration<\/strong>\n  <\/td><td>\n  Mandatory\n  under the Companies Act, 2013\n  <\/td><td>\n  Not\n  mandatory\n  <\/td><\/tr><tr><td>\n  <strong>Legal status<\/strong>\n  <\/td><td>\n  Separate legal\n  entity\n  <\/td><td>\n  Not a separate\n  legal entity\n  <\/td><\/tr><tr><td>\n  <strong>Liability of\n  the member<\/strong>\n  <\/td><td>\n  Limited\n  liability\n  <\/td><td>\n  Unlimited\n  liability\n  <\/td><\/tr><tr><td>\n  <strong>Maximum no.\n  of member<\/strong>\n  <\/td><td>\n  Minimum one\n  person (but a nominee is mandatory)\n  <\/td><td>\n  1 (sole owner)\n  <\/td><\/tr><tr><td>\n  <strong>Minimum no.\n  of member<\/strong>\n  <\/td><td>\n  2\n  persons (Director and the nominee)\n  <\/td><td>\n  1\n  person\n  <\/td><\/tr><tr><td>\n  <strong>Transferability<\/strong>\n  <\/td><td>\n  Allowed to only\n  nominee\n  <\/td><td>\n  Not allowed\n  <\/td><\/tr><tr><td>\n  <strong>Foreign\n  ownership<\/strong>\n  <\/td><td>\n  Allowed\n  <\/td><td>\n  Not\n  allowed\n  <\/td><\/tr><tr><td>\n  <strong>Taxation<\/strong>\n  <\/td><td>\n  Tax rate is\n  employed at 30% on the total income or profit\n  <\/td><td>\n  Taxed as an\n  individual\n  <\/td><\/tr><tr><td>\n  <strong>Annual\n  filings<\/strong>\n  <\/td><td>\n  Needs\n  to file several annual returns with the ROC\n  <\/td><td>\n  Only\n  needs to file Income Tax Returns\n  <\/td><\/tr><tr><td>\n  <strong>Survival<\/strong>\n  <\/td><td>\n  Continues even\n  after the death of the director as there\u2019s a nominee\n  <\/td><td>\n  Survival ends\n  with the death or retirement of the member\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Start_an_OPC_in_India\"><\/span>How\nto Start an OPC in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As of now, you might have understood that One Person\nCompany is one of the best choices for those who don\u2019t want any interference of\nothers. So, what is the process of incorporating an OPC in India? <\/p>\n\n\n\n<p>Below we have enlisted the steps required to obtain <a href=\"https:\/\/medium.com\/swaritadvisors\/start-your-own-opc-with-the-best-opc-registration-consultant-1540d4a248cf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"OPC registration in India (opens in a new tab)\">OPC registration in India<\/a>:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_1_Apply_for_DSC_Digital_Signature_Certificate\"><\/span>Step\n1: Apply for DSC (Digital Signature Certificate)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Firstly, you are required to obtain a DSC from the\nconcerned authority by filing the application to the MCA (Ministry of Corporate\nAffairs). <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_2_Companys_name_approval_through_RUN\"><\/span>Step\n2: Company\u2019s name approval through RUN<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Secondly, get your company\u2019s name approved through RUN\n(Reserve Unique Name) Service.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_3_File_SPICe_or_INC-32_Form\"><\/span>Step\n3: File SPICe or INC-32 Form<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>You need to attach all the documents as described\nbelow along with the SPICe form. <\/p>\n\n\n\n<ul><li>Copy of PAN;<\/li><li>Copy of Voter card or\npassport or driving license, etc.;<\/li><li>Passport-sized\nphotograph;<\/li><li>Latest bank statement or\ntelephone bill;<\/li><li>MOA (Memorandum of\nAssociation0 &amp; AOA (Articles of Association) of the company;<\/li><li>Copy of sale deed or\nproperty deed (if you have owned property);<\/li><li>Copy of Rent Agreement;<\/li><li>NOC (No-Objection\nCertificate) from the property owner (if rented);<\/li><li>Other documents as\nrequired. <\/li><\/ul>\n\n\n\n<p>Upload all these documents on the MCA\u2019s website along\nwith the DSCs of the Director. With SPICe, you are also supposed to file for\nDIN (Director Identification Number). The ROC (Registrar of Companies) will\nprovide with PAN &amp; TAN of the company, DIN, etc. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_4_The_Certificate_of_Incorporation_of_an_OPC\"><\/span>Step\n4: The Certificate of Incorporation of an OPC<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Registrar of Companies will inspect the documents and application carefully. If he is contended with them, he will issue the Certificate of Incorporation. You can download the Certificate of Registration from the MCA\u2019s <a href=\"http:\/\/www.mca.gov.in\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"website (opens in a new tab)\">website<\/a>. <\/p>\n\n\n\n<p>Furthermore, you will receive the CIN (Corporate\nIdentity Number) from the ROC. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concluding_Remarks\"><\/span>Concluding Remarks<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>One Person Company is probably the best option for\nanybody who wishes to start the business as a sole owner. The reason for the\nsame is the several advantages this business structure offers, one of which is\na limited liability. <\/p>\n\n\n\n<p>Likewise, there are multiple other reasons why you should choose OPC business form as a start-up. Therefore, now that you are aware of the benefits of OPCs over <a href=\"https:\/\/swaritadvisors.com\/sole-proprietorship-registration\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Sole Proprietorship (opens in a new tab)\">Sole Proprietorship<\/a>, you can start your own One Person Company and be the only owner. <\/p>\n\n\n\n<p>In case you have any further queries, <a href=\"https:\/\/swaritadvisors.com\/contact-us\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"contact (opens in a new tab)\">contact<\/a> Swarit Advisors. We are trusted and known to provide the fastest registration, that too at nominal charges. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>One Person Company (OPC) came into existence with the sole purpose of encouraging the entrepreneurs to start their own company as a single owner. But you must not confuse it with the Sole Proprietorship. The fundamental difference between One Person Company and Sole Proprietorship lies in terms of the liability. OPCs have limited liability, whereas, [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":4950,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[193],"tags":[194,195],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/4949"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=4949"}],"version-history":[{"count":10,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/4949\/revisions"}],"predecessor-version":[{"id":14868,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/4949\/revisions\/14868"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/4950"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=4949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=4949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=4949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}