One person company (OPC) implies an organization shaped with only one (single) individual as a part, not at all like the customary way of having no less than two individuals. In the event that Promoters are beginning a business (Company) or attempting to grow a current business (Company), all positively will require fund. This fund can emerge out of different sources.

Source of Funding:

Roughly speaking, Investments separate into two unique forms: Debt and Equity.

Debt Funding: This implies fund acquired from banks by the organization and it pay the premium on that venture. Organizations are expected to reimburse the fund with revenue over the long term. Debt incorporate debentures, loans and getting and so forth.

Equity Funding:

Company can take on an equity speculation – in which Company can offer a part of the Company to a financial backer as a trade-off for money or something different of worth. Equity financing incorporates shares (Equity/Preference Shares).

By and large first source of capital will likely be the loan from advertisers. Barely any organizations are totally financed by parties other than the business visionary. There are unmistakable benefits for advertisers here: 100 percent control and proprietorship. Advertisers own the entire organization, control the show, and remain to procure the additions with the goal that your endeavor become important. In this blog we will examine financing of Private Limited Company by Equity .

According to sub-clause (iii) of Clause 68 of Section 2 of Companies Act, 2013 meaning of Private Company “signifies a Company which by its blogs denies any solicitation to people in general to buy in for any protections of the Company.

Loan borrowing

Sections involved

Section 179(3) The Board of heads of the Company will get fund for the benefit of Company method for goals passed at gatherings of Board of Directors. Section 2(31) Includes any receipt of fund via store or Loan or in some other form by a Company. [2]Section 73 Prohibition on acknowledgment of stores from public.

  1. RULES INVOLVED: Rule 4,5,6,7 of (The Companies (Acceptance of Deposits) Rules, 2014-Forms and specifics of ads or brochures, way and degree of store, Creation of safety and of Trustee for stores Rule 18 of The Companies (Share Capital and Debenture) Rules, 2014
  2. Roundabout INVOLVED: G.S.R. 464(E) dated fifth June, 2015 – According to this roundabout there is compelling reason need to document MGT-14 by Private Limited Company on acknowledgment of loan. Section 180 doesn’t have any significant bearing on the Private Limited Company. Clause (a) to (e) of sub-section (2) of Section 73 will not matter to Private Limited Company which acknowledges any monies from its individuals monies not surpassing 100 percent of total of the settled up share capital and free saves, and such Company will record the subtleties of monies so acknowledged to the Registrar in such way as might be Specified. G.S.R. 695(E) dated fifteenth September, 2015-The Companies (Acceptance of Deposit) second change Rules, 2015′.
  3. Forms INVOLVED: No form is expected to be filed with ROC if there should arise an occurrence of acknowledgment of Loan by Private Limited Company.
  4. Goal INVOLVED: For the acknowledgment of Loans by the Private Limited Company a “[3]Board Resolution” will be passed in the Board Meeting of the Company. Executive Meeting can be held through video conferencing too.
  5. Loan From Directors: according to Chapter V, The Companies (Share Capital and Debenture) Rules, 2014 , point VIII of meaning of Deposit. Any sum receipt from, the individual season of acknowledgment was a Director of the Company, won’t be considered as Deposit.
  6. Private Limited Company can acknowledge stores from the Members up-to 100 percent of total of the settled up share capital and free holds. (Clause (a) to (e) of Section 73(2) won’t be relevant on Private Limited Company on the off chance that store is up-to 100 percent of settled up share capital and Free Reserve)
  7. [4]If the Company needs to acknowledge the stores of over 100 percent of settled up share capital and free hold from the individuals from the Company then organization can acknowledge a similar by following the strategy referenced under Section 73.

III. Loan from Relatives of Directors: According to Companies (Acceptance of Deposit) second revision rules, 2015 in rule 2, in sub-rule (1), provision (c), of sub-proviso (viii), the accompanying will be subbed, in particular:- (viii) any sum got from a the individual, at the hour of the acknowledgment of the sum, was an overseer of the Company or a relative of the head of the private limited organization. Any sum receipt from, the individual season of acknowledgment was a relative of head of the Company, won’t be considered as Deposit.

 

Loan from government entities

State/Central Govt. Any sum got from the Central Government or a State Government, or any sum got from whatever other source whose reimbursement is ensured by the Central Government or a State Government or any sum got from a nearby power, or any sum got from a legal power comprised under an Act of parliament or a state governing body.

 Foreign Government/different Sources:

Any sum got from foreign Governments, foreign/global banks, multilateral monetary establishments (counting, yet not restricted to, International Finance Corporation, Asian Development Bank, Commonwealth Development Corporation and International Bank for Industrial and Financial Reconstruction), foreign government possessed improvement monetary foundations, foreign product loan offices, foreign teammates, foreign body Corporates and foreign residents, foreign specialists or people occupant outside India subject to the arrangements of Foreign Exchange Management Act, 1999 and rules and guidelines made there under.

Loan from Banking Company:

Any sum got as a loan or office from any financial organization or from the State Bank of India or any of its auxiliary banks or from a financial foundation advised by the Central Government under section 51 of the Banking Regulation Act, 1949 (10 of 1949), or a relating new bank as characterized in provision (d) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (5 of 1970), or from a co-usable bank as characterized in proviso (b-ii) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934).

Conclusion

One more benefit of an OPC is the simplicity of getting advances and unendingness. “OPCs give ceaseless progression and limited liability to organizations. They likewise give straightforwardness and unmistakable personality to the business, which is gainful according to the viewpoint of raising support and business development.