Only one Person Company (OPC) is a type of company structure that is becoming more and more common among Indian entrepreneurs. It was enacted as a part of the 2013 Companies Act. OPCs are a particular kind of business that only has one owner and are handled as independent legal entities. For company owners who desire to launch their own ventures, opc registration in India offers a number of advantages. You’ll talk about the advantages of OPC registration in the India in this article.
BENEFITS OF OPC REGISTRATION IN INDIA
- Limited Liability:
One of the main advantages of OPC registration in the India is limited liability. In the event that the company experiences debt or losses, the owner’s personal assets are safeguarded. The reason for this is that the owner’s responsibility is constrained to the number of share capital put in the business, and the company is considered as a different legal entity from the owner. This means that, beyond the share capital contributed, the owner is not personally accountable for any of a company’s debts or losses. Since their savings, home, car, and other personal belongings are safe, this gives the owner as well as their family a sense of security. Because it lowers the risk involved with starting a new business, limited liability also promotes entrepreneurship as well as business growth.
- Separate Legal Entity:
Another significant advantage of OPC registration in India is separate legal entity. The OPC is considered as an independent legal entity once it is registered, apart from the owner. This indicates that the company is able to sign contracts, hold property, and file or defend legal actions in its own name. Additionally, it offers the owner limited liability protection, ensuring that their personal assets are safe in the event that the company experiences debt or losses. This separation of a legal entity and the owner gives the company legitimacy and reputation, which are critical for its expansion and success. Additionally, it supports the development of confidence and trust among stakeholders, including clients, financiers, and suppliers.
- Perpetual Succession:
A distinctive element of OPC registration in the India is perpetual succession. In other words, the business survives the death or incapacitation of the owner. In the event of the owner’s death or incapacity, the nominated director chosen by the owner receives ownership of the business. This guarantees the company’s continuance and gives the owner as well as their family a sense of security. This feature aids in ensuring the business’s longevity and continuance even after the owner’s passing. Additionally, it offers stability as well as certainty to the company’s stakeholders, including the employees, clients, and suppliers, who can carry on doing business with the business even after a owner’s passing.
- Tax Benefits:
Additionally, OPC registration in the India offers tax advantages to business owners. Compared to personal income tax rate, as well as the company’s profits are taxed at a lower rate. In addition, the owner is entitled to tax deductions for expenditures made in running the firm.
- Single Ownership:
OPC registration at India is appropriate for business owners that desire to operate independently. The owner has total authority over the company and is free to make choices alone. The owner benefits greatly from the flexibility as well as independence this offers.
Procedure for OPC Registration:
OPC registration in India is a simple process that takes only a few weeks to complete. Given are a detailed explanation of the procedure:
- Get a DSC (Digital Signature Certificate)
Get the digital signature certificate (DSC) for a owner as the initial step in OPC registration. This is necessary in order to submit the OPC registration application.
- Get your Director Identification Number (DIN)
The next action is to get the owner’s director identification number (DIN). Any person who wants to be a director of the company in India must have this special identification number.
- Name Acceptance:
Getting the prospective company’s name approved is the next stage. The name must be original and distinct from any other Indian company names already in use. Additionally, the name shouldn’t be offensive or contravene any rules or laws.
- Documents for incorporation filed:
The following step is to file the incorporation paperwork with a Registrar of Companies (ROC) when the name has been authorized. The company’s Memorandum of the Association (MOA) as well as Articles of Association (AOA) are included in the documents.
- Obtain an incorporation certificate:
A certificate of incorporation will be issued for the business by the ROC if it is satisfied with the paperwork that were submitted. It can be seen from this certificate that the business has been registered with a ROC.
Challenges in OPC Registration:
OPC registration in India provides a lot of advantages, but there are also certain difficulties that business owners could run into. The following are some typical difficulties:
- An approval delay:
Delays in ROC clearance are one of the key obstacles that business owners in India must overcome while registering their OPCs. Based on the ROC’s workload, the approval process may take a few weeks to a few months.
- Conditions for compliance:
The owner must adhere to several legal and regulatory regulations after registering the OPC. This entails keeping accurate financial records, submitting yearly reports, and abiding by tax regulations. Penalties and fines may apply if these rules are not followed.
- Registration Fee:
In India, registering an OPC may be expensive, especially for business owners who are just getting started. Registration fees, and legal fees, as well as other costs are included in the price.
For company owners who desire to launch their own ventures, opc company in india offers a number of advantages. It offers restricted liability, establishes a distinct legal organization, guarantees permanent succession, offers tax advantages, and permits single ownership. The registration procedure is simple, but business owners could encounter obstacles including a delay in approval, compliance requirements, as well as the registration fee. In general, OPC registration is a fantastic choice for business owners who wish to launch a company in India, benefit from the advantages of a distinct legal entity, and retain all control over their company.