One Person Company (OPC)

What is a One Person Company(OPC) and how is it different from an ordinary private limited company??

One Person Company is a new type of business entity. A private limited company can be formed with a minimum of two directors and shareholders. The directors and shareholders can be the same individuals. The one-person company allows a single entrepreneur to get his business registered as a company and get limited liability protection..

What is the minimum capital requirement to start an OPC??

There is no mandatory requirement for a minimum Authorised and paid-up capital. Hence, you can start as an OPC with a capital contribution as low as Rs. 2. However when the paid-up capital exceeds Rs. 50 lakh, OPC must mandatorily convert to a private limited company( Pvt. ltd.). Also, when the average turnover for 3 consecutive years becomes Rs. 2 crores or more, there is a need to convert into a Pvt. Ltd..

. Is there any tax advantage on forming an OPC??

There is no specific tax advantage to an OPC over any other form. The tax rate is flat 30%, other tax provisions like MAT & Dividend Distribution Tax apply as they apply to any other form of company..

What is the eligibility criteria for an member of OPC??

A natural person who is resident in India and an Indian Citizen who is living in India for a period of 182 Days is eligible to act as a member and nominee of an OPC A person can be the only being a member of one OPC. If a person becomes a member or nominee of 2 or more 2 OPC’s then he has to withdraw his membership from the OPC within 182 days..

Do I need to be physically present during this process??

The Ministry of Corporate Affairs (MCA) has made the new OPC registration a completely online process. All the document flow happens in electronic form and there is no need for any physical presence..