Benefits of One Person Company Registration in India
Benefits of one person company registration
The concept of One Person Company was introduced in India, where entrepreneurs have the ability to start a venture by allowing themselves to create an individual financial institution. Although a one-person company allows a sole proprietor to manage a corporate entity with limited liability protection, the OPC has some limitations. For example, each one-person company (OPC) must nominate a nominee director in the organization’s MOA and AOA – they become the OPC owner if the sole director is terminated. What is your exact need?. Here we discuss about Benefits of One Person Company Registration in India in this article.
OPC Business helps start-up entrepreneurs to easily test their business model and once they have built a marketable product, they can easily approach angel investors, venture capitalists for funding and easily transform their OPC into a multi-share private limited company. One Person Company is an expanded form of niche with a wide range. OPC is one of the easiest forms of corporate management. Very little ROC filing must be filed with the Registrar of Companies (ROC). There is no need to hold the Annual General Meeting (AGM) and other regular complaints.
A person willing to merge with OPC must provide the following information:
a. OPC name
B. The nature of the activities of the One Person Company
C. Nominee in place of a single member
Purpose of OPC
The OPC member must select the nominee and submit the nominee’s written approval to the Registrar of Companies (ROC). The nominee becomes a member of the OPC in the event of death or in case of other incapacity of the member. A member of the One Person Company may at any time change the name of the nominee as indicated to the ROC. Due to the death of the member, the nominee is automatically entitled to all shares and liabilities of the OPC. Therefore, the death of an OPC member does not end the business of the OPC.
OPC can be formed as a company limited by shares or as a company limited by guarantee. If limited by shares, it must meet the following requirements:
a. The minimum payment capital is Rs. 1, 00,000 / –
B. limits the right to transfer its shares
C. The company prohibits any invitation to the public to become a member for securities
It is important to note that the new law classifies One Person Company as a private company for all legal purposes. But, there are some powers and exceptions that are not available to private companies. Some exceptions:
According to Section 92 of the Companies Act, 2013, in the case of OPC, the annual revenue must be signed by the Company Secretary or signed by the Company Director where the Company Secretary is not present. A copy of the financial statements duly received by its member to the OPC ROC, along with all aids to be attached to such financial statement, must be filed with the cash flow statements within 180 days of the end of the financial year.
The financial statements along with the assistant must be signed by one director only and the annual return must be signed by the company secretary and director and the company secretary otherwise by the director only. The purpose of the One Person Company is to promote the proprietary form of business, enabling business start-ups with limited personal liability compared to unlimited personal liability as in the case of sole proprietorship. One Person Company opens up a number of avenues for more convenient banking facilities, especially for such employers as well as reducing lending and paperwork. OPCs are essential because they provide a platform to participate in the country’s economic activities and are expected to attract investors who are apprehensive before investing in a sole proprietorship business due to unlimited liability.
Benefits of One Person Company:
1. Specialized legal entity
One Person Company is a specialized legal entity and the ability to do everything an entrepreneur does.
2. Easy funding.
It can raise funds through a private limited company, OPC Venture Capital, Financial Institutions, Angel Investors, etc. An OPC can raise funds so that a private limited company can graduate.
3. More opportunities, limited liability:
One of the advantages of a one person company is that it has more potential, limited liability OPC’s liability is limited to the limit of the value of the share you own, so the individual can take more risk in the business without being affected or hurt. Damage to personal property. It is an incentive for new, young and innovative start-ups.
4. Minimum requirements:
Minimum 1 shareholder, minimum 1 director, director and shareholder may be the same person. OPC faces a lower compliance burden compared to private limited companies, so OPC can focus more on other functional and core sectors.
5. Benefits of being a (SSI):
An One Person Company can avail various benefits such as low interest rate on loans to small scale industries, easy funding from the bank, foreign trade policy and a wide range of benefits without depositing any security up to a certain limit. All of these benefits are a boon to any business in the early years.
6. Single owner:
Only the employer can help you make a quick decision, control and manage the business without having to follow the extended processes and procedures followed in other companies. The concept of belonging motivates the business to grow further.
7. Credit rating;
An OPC with a bad credit rating can also get a loan. OPC’s credit rating is not material if it is in accordance with OPC’s rating regulations.
8. Benefits under Income Tax Act:
Any salary paid to the Director is allowed as a deduction under the Income Tax Act as opposed to the ownership. Tax other benefits of attendance tax are also available subject to income tax law.
9. Receive interest on any late payment:
One Person Company receives all benefits under the Enterprises Development Act, 2006. Newly launched OPCs are micro, small or medium, so they fall under this law. By law, if the buyer or receiver receives any late payment (receiving the payment after the due date), then he is entitled to receive three times more interest than the bank rate.
10. Increased Confidence and Prestige:
Any business organization running in the form of a company will always gain increased trust and prestige.