One Person Company (OPC) is a superior and enhanced version of a sole proprietorship firm in Jaipur, Rajasthan. For carrying out medium sized businesses, One Person Company becomes a prominent type of business structure.
In this business structure, the owner of the company is the shareholder who has complete control over the company. Along with that the liability of the shareholder is limited which helps him to prevent his personal assets. Like a private limited company, OPC in Jaipur, Rajasthan can also appoint a different individual for the position of the director for the management of his company.
Difference between Sole Proprietorship firm and One Person Company
A business which is owned, led, and governed by one person is known as sole proprietorship. As this type of business is very easy to start, it attracts more investors to start sole proprietorship.
The owner of the business is eligible to enjoy the entire profit of the business but on the other hand he or she is also entitled for all the losses of the business. Like if any creditors are entitled to receive money from the sole proprietorship, they can sell the personal assets of the owner to clear their debts.
Also, as the owner and business are not different legal entities, the business is discontinued if the owner is deceased. All the difficulties and issues faced by the sole proprietorship are eliminated in the case of One Person Company (OPC) in Jaipur, Rajasthan, which provides lots of benefits to the businessmen, small traders, and entrepreneurs.
The cost of registration and maintenance of One Person company (OPC) in Jaipur, Rajasthan is very minimal. One person Company business type acts as a separate legal entity with the feature of perpetual succession along with the benefit of limited liability.
A person can become a shareholder cum director and register as a One Person Company (OPC). And in case of One Person company, it is mandatory to appoint a nominee. The nominee should be a resident of India.
In the event of the death of the owner of the One Person company, the nominee becomes the owner of the company and handles the affairs and administration of the company.
Incorporation of a One Person company is very simple process and involves paperwork. Owner needs to pay the required fees to the ROC for registration of the company and needs to appoint a company secretary to receive his services in the form of drafting and signing of the required documents for incorporation of a company. In the case of forming a sole proprietorship firm the above procedures are not needed.
The finest part of incorporating a One Person Company in Jaipur, Rajasthan is that it helps in obtaining Brand image and corporate recognition. It becomes the main reason for an investor to start a One Person Company.
Conversion of Proprietorship into One Person Company (OPC) in Jaipur, Rajasthan
Rajasthan, in terms of area, is the largest state of India sharing borders with Punjab, Haryana, Uttar Pradesh, Madhya Pradesh and Gujarat. The main Industries in Rajasthan includes prime industries like cement, Auto components, ball bearings, sugar, chemicals, dyes, textile, woolen products, rugs, vegetable oil like mustard and soybean, etc. Heavy industries in the state of Rajasthan comprise of sectors like copper / zinc smelting along with manufacturing of railway rolling stock. The key business strength of Rajasthan comprise of mineral based industries, tourism, textile, gems and jewellery. Rajasthan enjoys the position of leading producer of commodities like cement, metals like copper, zinc, lead, etc. It is the largest producer of stones and marble in the country with its deep mined across the state.
Rajasthan is the state with agriculture sector contributing more than 25% of state GDP in last FY. The state of Rajasthan provides extensive opportunities in the areas of organic and contract farming with being among the largest producer of cereals, pulses, oilseeds, garlic and coriander. The state has more than 850 business/factories in the food processing sector and offer much more potential. Rajasthan is one of the highest mineral producing state and only state lead and zinc production in India. With big reserve of limestone, it offers a suitable destination for cement industry. The tourism sector is also ery flourished in the state of Rajasthan with more than 50 million tourists visiting state every year. Jaipur in the beautiful town that hosts various sectors like jewellery, gems, textiles including readymade garments apart other items like rubber-based prosthetics, hand-knotted rugs, food and beverages, tobacco, automobiles and bicycles manufacturing, and machinery and machine tools. Jaipur is a big time destination for tourism and attract tourists from across the globe.
Rajasthan ranks first for “Export Preparedness Index 2020” under the category of Landlocked states. With extensive and well built network of national highways and railways, it offers connectivity to each and evry corner of state and other parts of country especially Gujarat and Maharashtra. An international airport in Jaipur contains an air-cargo complex and eight inland container depots. In Neemrana, Rajasthan, the state successfully house India’s first Japanese Industrial Zone spread across 473 hectares
Not only this, as per the latest report by World Bank, Rajasthan ranked 8th out of 36 states in terms of ease of doing business.
Advantages of One Person Company over the Sole Proprietorship in Jaipur, Rajasthan
- Limited liability and Separate Legal Identity: Registration of a business as a One Person Company (OPC) gets a separate and distinct legal identity in Jaipur, Rajasthan which helps the owner to enjoy the benefit of limited liability to the extent of his/ her own share in the company.
- Opens door for business opportunity: Most of the large sized organisations prefer to do business with the companies rather than sole proprietorship firms. Registration of a One Person company in Jaipur, Rajasthan is same as that of a private company in Jaipur, Rajasthan and as the private company is the trustworthy form of business organisation, it helps the One Person company to raise the funds easily. It helps the suppliers and customers of the business to build confidence in the company in Jaipur, Rajasthan.
- Manageable Structure: As only one member is required to start a One Person Company, It is very easy to manage the structure of the business. Conducting an Annual general meeting is not required in this type of business. The decision-making process is very easy and quick as there is only one person or authority who is responsible to make the necessary decision for the company.
- Structure like a private company: The structure of the One Person Company is the same as the private limited company which makes it organized giving the benefit of limited liability. The benefit of the organized structure is not provided by the sole proprietorship firm.
- Ease in availing loan facility: Banks and other financial institutions give preference to the company rather than propitiatory firms in lending money. So, converting the sole proprietorship firm into a One Person company helps them to get the loans easily from the banks and other financial institutions.
- Filing of Annual Return: The mandatory requirement of getting the annual return signed by the company Secretary is not required in case of One Person Company. In OPC, it should be signed by the director.
Process for Conversion of Sole proprietorship to One Person Company in Jaipur, Rajasthan
Two people are required to register for an OPC in Jaipur, Rajasthan, One of which is the owner/ director, and the second person will be the nominee. Following are the steps for converting a sole proprietorship into a One Person company in Jaipur, Rajasthan:
- Obtain Director Identification Number (DIN): The first step in converting is that the owner needs to apply for Director Identification Number in Jaipur, Rajasthan.
- Obtain Digital Signature Certificate (DSC): The Owner/ director needs to obtain a digital signature certificate and the same must be submitted to the Registrar of Company in Jaipur, Rajasthan.
- Application for approval of name: The owner needs to check whether the chosen name for his company is available or not. The chosen name should be in accordance with the compliance of the guidance given by the Ministry of Corporate Affairs. The owner can choose six names and submit it by giving his priority based on which the name is allotted in accordance with the availability. The name of the company should be of at least 2 words, One which depicts the name of the company and the other shows the nature of the business.
- Drafting of Memorandum of Association (MOA) and Article of Association (AOA): After the approval of the name of the company, the draft of the MOA and AOA of the company along with various other required documents needs to be prepared.
- Filing of E-forms: Once the Memorandum and Article of Association is drafted, an application needs to be filed for registration of the company and the MOA, AOA and all the other required documents need to be submitted with the Registrar of the Company.
- Issuance of the Certificate of Incorporation: After the submission of all the documents, the Registrar of the Company (ROC) verifies all the documents and after scrutinizing all the documents and successful validation, ROC issues the Certificate of Incorporation to the owner of the Company.
- Apply for the TAN and PAN of the company: After the incorporation of the company, it needs to apply for the TAN (Tax Deduction and Collection Account Number) and PAN for the company.
Documents required in converting sole proprietorship firm into a One Person Company in Jaipur, Rajasthan:
- Pan Card of the director and shareholder of the company. And if they are of foreign nationality, then they need to submit a copy of the valid passport.
- Directors and shareholders need to submit a valid identity proof like Voter ID, Driving license or Passport.
- Director and shareholder in Jaipur, Rajasthan should have a valid address proof in form of Electricity bill, telephone bill, or latest statement of bank account.
- Director and shareholder’s passport size photograph.
- Address proof like Rent agreement, telephone bill or electricity bill of the registered office address in Jaipur, Rajasthan.
- No Objection Certificate (NOC) from the owner of the office property in Jaipur, Rajasthan.
- Approval from the nominee must be in writing.
- Latest Income tax return copy of the owner.
- The One Person Company is required to have authorized capital of minimum Rs. 1 lac.
- Transferring of shares to any other person is prohibited in case of One Person Company.
- An individual can only have a single One Person Company at one time in Jaipur, Rajasthan.
- An OPC is restricted from inviting public to subscribe its securities.
- An OPC needs to inform the Registrar about all the contract it is entering into along with its single member within 15 days from the date of contract or agreement.
- It is mandatory for the OPC in Jaipur, Rajasthan to file form ADT 1.
- Till the time the OPC is meeting all the annual compliance after the incorporation of the company, it will be active and in existence. The company will set as a dormant company if in case the annual compliance is not met. The registrar can also strike off the company which can be resuscitate only for a time being of up-to twenty years.
- Nominee is appointed in the case of One Person Company to retain its characteristic of perpetuity which means continuation of the business in the event of the death of the owner. Any person can be appointed as the nominee subject to he or she should have a valid Pan Card in her or his name.
- The nominee of the company can anytime be changed by giving prior intimation to the Registrar of the Company in Jaipur, Rajasthan.
- A One Person company in Jaipur, Rajasthan can become a member of the other private limited company as there are no restrictions given in the Act.
- A One Person company after a period of 2 years from the incorporation date can easily be converted into a public limited company or a private limited company in Jaipur, Rajasthan.
- Registration of a One Person Company has become an online process. So, the person is not required to be physically present at the time of registration in Jaipur, Rajasthan.
- The One Person Company need to file the form INC- 4 in case of the death of its member, disqualification of contract or any kind of change in terms of ownership of the business. And the details of the new user or member need to be provided in the same form.
- To fasten the process of the registration of One Person Company in Jaipur, Rajasthan, the promoter should ensure that the chosen name for the company is unique. Along with that all the necessary documents required in relations to the nominee, subscriber, director, and the registered office is proper and accurate.