One Person Company [ OPC ] – A welcome FIRST step

 

 

Dear Smt Sitharamanji,

During your budget speech, you announced changes proposed to be made in respect of One Person Company

This is a very welcome step .

Though they may not admit publicly ( political hara-kiri ? ), Indian politicians and economists agree that, neither the Public Sector nor the Private Sector can provide jobs to 12 million youth every year – year after year

Now consider this :

Ø  No of Indians in age-group 15 -24 …………………… 229 million

Ø  Unemployment Rate in this group……………………..   24 %

Ø  That is ……………………………………………………………………  55 million

I hope the details of OPC relaxations planned, when released, will consider the suggestions that I had e-mailed in my following blogs :

A NEW ECONOMIC ORDER ? aka " Start Up Act - 2015 "…………….. [ 12 Sept 2015  ]

21-22 Budget Blues : One Person Company ( OPC )………………………[ 01 Feb 2021 ]

 

Mere tinkering with OPC won’t help .

With regards,

Hemen Parekh  /  16 Feb 2021 /  hcp@RecruitGuru.com

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Sources :

Single, Ready to Start Up  /  ET Magazine Cover Story / Feb 07-13, 2021

Unlisted companies get to access funds raised at shorter time span  / BL  / 13 Feb 2021

The one man show: Understanding the concept of One Person Company  / ET / 23 Nov 2019
FAQ On One Person Company  /   Ministry of Corporate Affairs 

One Person Company

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OPC Provision	As reported in ET Cover Story and other sources ( Budget )	As suggested in my blog / e-mail  (  12 Sept 2015  )
Financing - Funding	Easier Bank Credit facilities / Unlisted companies allowed to utilize the funds raised within a shorter period of time	A Start Up will be free to raise  funds from any source ( Individuals / Companies / PE funds / VCs / Angel Investors / Religious Trusts etc ) 100 % FDI will be permitted in Start Ups A Start Up can receive loans or equity and be able to accept fixed deposits . It can also give loans to individuals or other Start Ups or invest in other Start Ups by way of equity
Hiring of employees
Audit & Documentation	No need for complex
Residency Limit	From 180 days to 120 days
Who can start	Earlier only Indian Citizen were allowed to start OPC, now even NRI	A Start Up can be launched by any Indian citizen under the age of 30 ( covering roughly 65 % of our population )
Max/Min Paid-up Capital Requirement	No more thresholds / Unlimited Growth / No min capital requirement of Rs 1 lakh
Conversion	Can convert into any type of company, at any time / Flexibility to keep it as an OPC or convert to Pvt Ltd Co / Bring in other Shareholders / offer ESOPs / No mandatory dilution of the Founder’s Equity / No need to find a Partner	Instead of Companies Act - 1956 , these Start Ups will be governed by the Start Up Act - 2015
Who will OPC help ?	Unorganized micro businesses
Process	Just register the OPC with RoC / No need for a MOU / hiring Auditors – Company Secretary / doing bi-annual Audits / holding Board Meetings / Ensuring quorums / Staff	A Start Up will need to register online on the web site of the Income Tax Department and obtain a unique " Start Up Number "
Corporate Tax Payable		Although all Start Ups will need to file annual Income Tax returns ( with full disclosure of income / expenses / profits / sources of funds etc ) , it will not be required to pay any Corporate Income Tax for the first 10 years of its existence There will be no restrictions on what interest ( on loans / FDs ) that a Start Up may pay nor any restrictions on dividends it may declare           The dividends declared by Start Ups will not attract any Income Tax