In this article, we shall discuss the minimum paid up capital of One Person Company. An entity created under law or by consent of law to carry on business for profit is called a company. Its shareholders own the shares. In One Person Company, an individual owns all the assets, liabilities, and profits and bears all the company’s risks. It is a relatively quick and easy process to set up a One Person Company.
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What is One Person Company?
A One Person company is a company formed by only one person. A One Person Company is a one owner based independent business. To set up OPC, you’ll need to complete some paperwork and pay a filing fee. After this, you can advertise your business and field customers.
Things to know while setting up a One Person Company
- The business has only one owner.
- All financial decisions made by the business owner.
- When registering your business with the state, a proof of insurance is required.
- A registered business name and address is essential to start an OPC.
- The sole director is responsible for filing taxes.
How to start a One Person Company?
- An OPC is a business owned and operated by One Person.
- Digital Signature Certificate is required to set up a One Person Company.
The following documents are needed to apply for a DIgital Signature Certificate (DSC).
- Business Address
- PAN of applicant
- Aadhaar of applicant
- Passport size photo
- Applicant’s email and phone number
Once the documents for DSC are submitted, apply for Director Identification Number (DIN) and then the company’s name is decided. After finalizing the name, apply for Memorandum of Association (MOA) and Article of Association (AOA) in Ministry of Corporate Affairs (MCA) along with the Incorporation Certificate.
Know about the checklist for seting up an OPC.
What are the benefits of starting One Person Company?
In a One Person Company an individual or business owner is the Sole Proprietor, with all the business’s rights and responsibilities.
One Person Company has many advantages:
- Complete control over your own business.
- The company can be run exactly the way you want.
- Middlemen who take advantage of you are absent.
- OPC is more profitable than other types of businesses due to fewer overhead costs (e.g. salaries, rent, etc.) to cover.
- OPC is a legally recognized business, hence easy to obtain funds and has fewer compliances.
Click here, What are the benefits of registering an OPC?
What is the minimum paid up capital of One Person Company?
The minimum paid up capital of One Person Company to be established in India is Rs. 1 lakh, but there is no obligatory minimum paidup capital. This makes the incorporation process relatively straightforward compared to other types of companies.
Starting an OPC is a relatively inexpensive procedure and it involves few simple steps. First, a business entity called One Person Company is created using the paidup capital of INR 1 lakh in India. Next, file your business registration and the DSC and proof of address. This DSC and DIN are generated in a day, and the certificate of Incorporation is issued within a week. A One Person Company can be completely setup within 10 days.
Who is eligible to setup a One Person Company?
The member should be an Indian citizen and have stayed in India for not less than 180 days in the preceding calendar year. More than one OPC cannot be incorporated by a single person. A member of One Person Company shall nominate name of another person with his consent.
In case there is death of the member or his incapacity to contract, the nominee becomes the member of One Person Company. There has to be one Director in the formation of a One Person Company. In an OPC, One Person (sole director) owns and operates the company. All the business dealings are the sole responsibility of the Director.
OPC is a great way to start your own business, but it’s also risky because you alone will be responsible for any mistakes, hence you need to be very organized and ready to handle all the business responsibilities independently.
Conclusion
The minimum paid up capital of One Person Company is INR One lakh. In a One Person Company, one person, typically the owner, is legally responsible for running the business. To set up One Person Company, some paperwork is completed and filed with the MCA.
After setting up, One Person Company is very profitable, as corporate overhead costs aren’t there to take into account. However, sole proprietors are personally responsible for all taxes and liabilities associated with their business.
FAQs
1. What is the minimum paid up capital of One Person Company?
The minimum paid up capital of One Person Company is INR 1 lakh.
2. What documents are needed to apply for a DSC?
The documents are needed to apply for a DSC are Business address, PAN of applicant, Aadhaar of applicant, Photo, Email and Phone number of the applicant.
3. What are the advantages of One Person Company?
The advantages of a One Person Company are complete control over the business. Freedom to run the company in a way you desire, absence of middlemen, more profitable business, and fewer compliances.
