One-Person Company or OPC is a company that has only one person as its member. Because members of a company are recognized as company’s shareholder or the subscribers to its Memorandum of Association, OPC is functionally a company with only one shareholder as its member.
OPCs are generally found when the business has just one founder or promoter. Due to many advantages that OPCs offer, entrepreneurs whose businesses are at nascent stage give more preference to the creation of OPCs rather than sole proprietorship.
PREREQUISITES FOR INCORPORATION
£ OPCs can have only one member or shareholder,
£ Sole member of the company has to mention a nominee while registering the company,
£ OPCs can have minimum 1 and maximum 15 directors,
£ Minimum Authorized Share Capital of ₹1 Lakh is required for incorporation,
£ Also, the paid-up share capital of OPC and its average annual turnover should not exceed ₹50 Lakhs & ₹2 Crore respectively, in relevant period,
£ The owner & nominee of one OPC cannot incorporate or register or become a part of another OPC.
COMPLIANCE CHECKLIST FOR OPCs AFTER INCORPORATION:
£ Applying for PAN & TAN Number, and Director Identification Number,
£ Opening Bank Account in name of business,
£ MSME or Udyam/Udyog Aadhar Registration, not mandatory, but beneficial to be registered under the same,
£ Auditing of accounts of company & filing tax return for every financial year,
£ Obtaining other registrations such as EPF, ESI, Professional Tax etc.,
£ GST Registration if turnover exceeds ₹40/₹20 Lakhs,
£ GST Return if registered under GST,
£ Appointment of First Auditor of the Company.