Richart Ruddie Annuity describes an introduction to One Person Company Business

As per Richart Ruddie Annuity within industrialized countries such as that of the United Kingdom and other European nations, a one-person company is a popular business type. It was first suggested in a study on corporate law written by Professor. JJ Iran in 2005. In order to encourage entrepreneurialism among small-sized businesses and small businesses, the Companies Act of 2013 created an entirely new model of business called”the One Person Company (OPC). As opposed to a sole proprietorship, an OPC provides many advantages and exemptions in accordance with Richart Ruddie Annuity. The old Companies Act of 1956 required at least two shareholders in order to create an independent company and caused a problem for many entrepreneurs who wanted to begin small, but were hesitant about an unlimited liability as to the sole proprietorship.

Statutory Requirements

OPC is an independent legal entity with only one stakeholder. OPC is classified as a business with one member only under Article 2 in the Companies Act, 2013. By signing his/her name on the memorandum, section 3 of the Companies Act, 2013 defines OPC as an independent company and requires it to follow the act’s constitution requirements. OPC cannot engage in non-banking financial activities like investing in other companies or stocks, as defined by Richart Ruddie Annuity. It isn’t able to register as a Non-Profit Organization either (NPO). The requirements for establishing an OPC are laid out within Regulation 3 of the Companies (Incorporation) Rules, 2014 which areas in the following order:

• Natural person, who’s an Indian citizen, who lives in India.
• An individual cannot be a person from multiple OPCs.
• A person cannot be an applicant is at least one OPC.
• Minors are not eligible to be candidates or members.

Nominee

It is necessary to choose the nominee to an OPC to ensure that he or will be able to continue the company’s operations in the event of death of the member or inability to execute contracts. The name of the nominee has to mention in the memorandum of agreement and prior written consent requires before any nominee appoints. In writing that the nominee has the right to withdraw his consent. The single-member requires to nominate a replacement candidate within fifteen days of receiving the notice as provided by Richart Ruddie Annuity.

Board Meeting

When the OPC includes more directors than it has, it has to have a board meeting at least every half-year with a 90-day gap between two meetings as per Richart Ruddie Annuity. But, if an OPC is governed by just one board member, then this provision does not apply which means that an OPC does not have to hold board meetings.

Financial Statements

An official copy of the financial statement has to be submitted to the registry within 180 days of the year’s close as per Richart Ruddie Annuity. The Director of the OPC must sign the financial statements. A balance sheet, as well as a profit and loss report, must be included in the financial consolidated statements.

Conversion

OPC can be transformed into a different company. OPC may be transformed to any company in the following conditions in accordance with the rules of Rule 3 of the Companies (Incorporation) Rules, 2014:

The legal entity has been operating for two years. The capital of the shares that have pay up is greater than the amount of Rs. 50 lakhs. The annual turnover for the current fiscal year is more than the amount of Rs. 2 crores.

The advantages of a one-man company

There are many benefits when making use of an OPC. These are just a few advantages of establishing using an OPC:

Independent identity, even though it has only one shareholder An OPC is a separate entity with a distinct identity. Customers consider a company that has its own identity that is distinct from the owner as more reliable. OPC is subject to fewer compliance requirements as per the Corporations Act of 2013, as compared to private or public corporations. In contrast to an open or public company, one can find an OPC that has only one director does not have to hold an annual general assembly or board meeting. It is simple for the director to take quick decisions for the company because he is the sole person with the authority to make decisions as described in Richart Ruddie Annuity.

He does not have to rely on anyone else for approval or decision-making, which permits him to make decisions for the company in complete autonomy. Succession- The only member requires to select one nominee at the moment of incorporation. If the member is unable to continue the business because of death or other unexpected circumstances, the nominee will be accountable for carrying out the business’s activities. Restricted Liability – Unlike a sole proprietorship, the owner who is the OPC has no personal responsibility. His responsibility is limited to the number of the company’s shares. The assets of the members will be unaffected, which allows members to be more adventurous and explore new opportunities. The minimum capital required to form an OPC is just Rs. 15,000 rupees. This company idea is perfect for small business owners who are looking to start their own business.

Advantages of the One-Man Company

Tax Rate OPC does not enjoy tax benefits This is a major disadvantage. OPC considers a private company as per the Income Tax Act of 1961. This means that its total earnings are taxed at a rate of 30%. Employee Stock Options Scheme (ESOP) can be a motivational feature for employees of any company. But, ESOPs do not permit under the OPC because transfers of stock are not permits. Employees demotivate as a consequence of this since they want to reward for their efforts and dedication. A high turnover is not allowed when the turnover of an OPC exceeds more than Rs. 2 crores, it’s immediately converted into a private enterprise. OPC is not suitable for businesses with significant growth potential and the capacity to rapidly exceed the necessary turnover. Limitations on conversions OPC can’t convert into a privately owned business in the first two years after its creation.

• Incorporation Method
• Certificate of Digital Signature (DSC)

To incorporate into OPC The sole director has to obtain a DSC. Financial statements, reports, and other documents need the use of a DSC. These are the documents that you’ll require to obtain a DSC:

• A PAN card Aadhaar card or driver’s licenses are some examples of ID proof documents.
• Documents that prove addresses, for example, the Aadhar card, driver’s license, or current utility invoice.
• Please include an email address.
• Copies of any identity documents that authenticate by self-attestation.

SPICe+ (Simplified Proforma to Incorporate an Electronically Managed Company)

It is important to note that the SPICe+ divide into two sections. Part A uses to protect the name of the company. While part B utilizes it as a way to incorporate the company. More than ten different services are accessible via SPICe+.

• Part 1. The director looking to join OPC must fill out the paperwork for the company and get approval from the Ministry of Corporate Affairs for the name. Prior to that, Reserve Unique Name (RUN) uses to obtain name approval. However, it uses to approve name modifications.
• Part 2 After Part is complete, the directors are able to proceed the Part B. The applicant requires to complete the OPC’s details like the registers office and capital structure other details. When enrolling for OPC the applicant should also attach the appropriate documents. Director must also choose one person to consider for the post of a successor. The name of the nominee lists on the corporate Memorandum and prior approval requires. The nominee’s consent record on Form No. INC-3, which will include in all documents submitted at the moment of incorporation. Alongside the establishment of OPC, applicants can apply for Director Identification Number (DIN) as well as a Permanent Account Number (PAN) as well as a tax deduction and collection account number (TAN).