There are certain limitations to build up the company under OPC. Here there must be one partner and one proprietor. A normal person, estate or a trust can construct the business under these kinds of forms. Hence, The professionals are cannot able to build an OPC. Let’s start with an example. The accountant cannot able to register opc only to practice accountancy. The OPC and company rules are against to such types of self-formation by professionals. Additionally, The OPC restrictions are off to banks, trust, pre-needed institutions, insurance, public companies, non-charted government etc. the corporate regulations are strictly prohibited to certain entities. The foreigners can start up their business in the Philippines according to the OPC act. These are under the foreign ownership limits.
Difference between Sole Proprietorship and OPC company
Most of the entrepreneurs who were not able to get the business partners to meet the five-person requirements are register under the sole proprietorships. Likely, The sole proprietorship means that the person is personally liable for all the risks caused by the company. If there any risks occurred it will treated on the personal resources and the business resources.
If the person is applying for an OPC the risks obtained are solved. The OPC can claim limited liability which means that the company’s and the person’s assets are treated as separately. Thus if any debt occurred it will not affect the personal assets of the persons. Conversely, Cases like if the business occurs the debt, demand on the entrepreneur’s assets etc stick only to the assets invested in the company. But in OPC the personal asses of the person has no impact on the debt of the company. The OPC maintains the income tax rate of 30%. When the tax day reaches each sole proprietors are treated as individuals because their rates are vary according to the gross sales.
Registration of an OPC
The OPC registration and the corporation incorporation both are same. Let us discuss the five main steps of registering an OPC.
- Firstly, we have to verify and get approval of company name
- Secondly, submit the appropriate registration documents
- Thirdly, get the fees for the payment.
- Submit the concerned documents along with the payment receipt
- Submit the certificates of registration of the company
OPC have a comparatively unique structure. The corporate code license and the exceptions are listing here. After the registration all the corporations have to add OPC at their names. The last end of the company name must contain the suffix as OPC. The peoples who are register their entity a one person are not requir to submit corporate bylaws or any official regulations. But the article of association is mandatory for all the entities. The owner of the company act as the director and the president of the company.
The OPC should have to appoint a company secretary and any other necessary appointments within 15 days of incorporation. The owner of the business cannot act as the secretary but can act as a treasurer. The OPC have a one board member, registrants and they should submit the written consent of nominee. The above persons can act as the designated individuals who will take care the business after the founder’s death.
The one person company is a new concept in the registration of business field introducing by Companies Act, 2013. The Companies Act was effectual from 1st April 2014. Now we can register the company under the OPC’s act and other company’s rules. Here we are going to discuss the silent features of OPC mentioned in the final version of rules.
Silent features of OPC
The one person company is incorporated as the Private limited company. It means both the entities perform the same tasks.
The director and the member’s number is only one at any point.
One Person Company or OPC must add in the suffix followed by the company name or it should be in brackets.
The nominee or the member should be a natural person, an Indian citizen.
The resident in India means the person who stays in India for a period of 182 days.
The one person cannot register more than 1 OPC or more than 1 OPC member.
The OPC lose its status if the paid-up capital exceeds 50 lakhs or the average turnover is more than 2 crores in a 3 financial year.
The person who is below 18 is not able to become a member of OPC or become the nominee of the OPC.
The OPC cannot able to convert into any other company under section 8.
The company cannot carry non-banking financial investments like securities of corporates.
The opc cannot able to convert into any other entity form only after the expiration date or exceeding the capital limits or threshold turnover.
Privileges in OPC
The rotation of an auditor after the expiry of the maximum term is not applicable in case of OPC.
The returns of the company are sign by the secretary. If the secretary is on leave then the directors have to sign instead of him.
The section 98 and the section 100 are not applicable to hold the general meeting in an OPC.
The one person company must have the minimum of one director and a maximum of 15 which can increase by passing a special resolution.
To hold the board meeting there should be one person and it should be sufficient for all the compliance requiring to pass the company. The details of the board meeting should sign into the minute’s book.
In each half of the calendar year the OPC should submit at least one board meeting. The gap between both the board meetings is 90 days.
The statements of each financial year get submit and sign by one director alone.
The one person company’s cash flow statements are not mandatory part of financial statements.
The registrar should signed the financial statements after the duly adoption by the member within 180 days of the financial year closure with concerned documents.