The Companies Act 2013 introduced a number of new concepts that had not previously existed in Indian company law. The sole proprietorship introduced a revolutionary concept. This has created a new way to start a business that offers limited liability protection not found in sole proprietorships or partnerships while providing all the flexibility a business needs.
Many other countries recognized the possibility of setting up companies before the newly enacted Companies Act 2013. Companies from China, Singapore, the UK, Australia and the US were some of them. One person company definition
The Company Law defines a one-person company as a company in which there is only one member, her. Members of a company are simply its shareholders and signatories to its articles of incorporation. Shareholder He is the sole shareholder of OPC company in india.
In such companies, she is usually the only founder or promoter. OPC is preferred by entrepreneurs early in their business because of its many advantages. Difference between OPC and sole proprietorship
Sole proprietorships and sole proprietorships may seem very similar because they are owned by one person, but they are also different.
Basically, their liabilities are the only difference between them.The OPC is a separate legal entity from the promoter, so it has its own assets and liabilities. It is not the founder’s responsibility to pay off the company’s debt.
However, a sole proprietorship has the same owner as the company. The law allows for the seizure and sale of the founder’s assets if the founder fails to meet his obligations to the company.
Characteristics of a one-man company
Sole proprietorships typically have the following characteristics:
The Companies Act provides that anyone can form a company under Section 3(1)(c). Additionally, according to the documentation, OPC is a private company.
Unlike other private companies, OPC can only have one member or shareholder.
An OPC differs from other types of companies in that the sole shareholder of the company must nominate a nominee when the company is registered. No eternal inheritance:
Since the OPC has only one member, her, that candidate will decide whether or not to become the sole member after her death. In contrast, other companies’ successions are permanent.
At least one director:
OPC must have at least one director (member). The maximum number of directors is 15.
No minimum paid-up capital:
For OPCs, the Companies Act 2013 does not stipulate a minimum paid-up capital. Perks:
The Company Law grants OPCs several privileges and exceptions not found in other types of companies.
Establishment of sole proprietorship
Under the Companies Act 2013, an OPC can be formed by him alone by signing the Memorandum of Association. In the event of the death or incapacity of the original member, the nominee will be nominated as the sole member.
The Registrar of Companies must have the nomination memorandum and the approval of the nominee. Registrars will always accept withdrawal requests from Candidates. In addition, the member can cancel the nomination at any time.
- Joining a private company
- Only Indian citizens and residents can form a private company in India. The same applies to OPC candidates. One person cannot be in charge of more than one of her OPCs at the same time.
- OPC is only available to natural persons. This does not apply to companies in which the company itself can hold shares. Additionally, a minor cannot participate in or act as a candidate for her OPC.
- Other OPC
- Transformation of a sole proprietorship into a non-profit enterprise. B. Nonprofit Entities are expressly prohibited. An OPC cannot voluntarily change to another legal form after two years of incorporation.
- Individual business benefits
- The Companies Act gives OPCs the following privileges and exceptions:
- There is no need to hold an annual general meeting.
- Financial statements do not require cash flow statements.
- The company secretary is not required to sign the annual report. A director can do that too.
- The provisions regarding independent directors do not apply to them. A director may also resign for additional reasons set forth in the Articles of Incorporation.
- In addition, it is not subject to some provisions relating to meetings and quorums.
- One company cannot pay its directors as much as another company.