OPC [one person company] is a new concept that has been established in the Company’s Act 2013. In a public company, there needs to be a minimum of 7 members and 3 directors. The same goes for a private company wherein 2 members and 2 directors should be present. A single person couldn’t start a company previously. One person company registration helps you do just that at present.
According to the Company’s Act 2013, an individual can form a firm with one director and one member. They can both be the same individual. The person can be an NRI or a resident of the country and can incorporate a business that includes the futures of a firm and the advantages of a sole proprietorship.
The one person company gets an independent legal entity status. The independent legal entity offers protection to the individual who incorporates it. The member’s liability is restricted to their shares and they are not personally accountable for the company’s loss. Thus, the creditors can take legal action against the OPC and not against the director or the member.
Easy to get funds
The financial institutions and the banks prefer to offer loans to a firm rather than a sole proprietorship company. As an OPC is a private company, it becomes much easier to raise funds via venture capitals, incubators, angel investors, etc.
There are certain exemptions for an OPC when it comes to compliances. The OPC doesn’t have to make create a flow statement. The secretary need not sign the account books and annual returns. They need to be signed by the director only.
Section 8 company
Non-Government Organisation [NGO] is an organization that functions for non-profit/ charitable purposes. NGO’s established under the Companies Act, 2013 as Section 8 company is governed by the MCA (Ministry of Corporate Affairs) while the NGO listed as a trust or society is managed by the registrar of state under the State Government.
Section 8 company registration has numerous advantages when compared to society and trust. This company type has more credibility amongst donors, government departments and stakeholders.
Once the Central Government is pleased that the association or the individual proposes to form a company having some objectives, it will grant a license to list the company as a section 8 company.
Benefits of section 8 company
The CARO [Company Auditor’s Report Order] doesn’t apply to this company. The company can enjoy great tax benefits under the 80G of the Income Tax Act, 1961.
No stamp duty
Section 8 company incorporation doesn’t involve any stamp duty. The company doesn’t have to pay stamp duty that is normally imposed on AOA [Articles of Association] or MOA [Memorandum of Association] of a public or a private limited company.
No minimum capital
A section 8 company registration doesn’t involve any minimal capital prerequisite. The capital structure can be changed at any time according to the company’s growth requirement. therefore, the funds needed for running the business can be brought in at a later stage via subscriptions and donations from members and the public.
You need to ensure that you gather proper information from authentic and credible resources about one person company registration or section 8 company and then carry on with your business endeavours.