ONE PERSON COMPANY REGISTRATION

ONE PERSON COMPANY REGISTRATION

One Person Company (OPC) is a type of Company that can be formed with only one person as a member or one Director.

INTRODUCTION

One Person Company (OPC) was introduced under the Companies Act, 2013. This was introduced to for the people who want to form the Company but does not want to go into the complex legal compliances one has to bear when they form a Private Limited Company or a Public Limited Company. Small entrepreneur or an individual who wish to give  their business idea a new outlook or opportunity to grow  can opt for forming the One Person Company. This can be formed with minimal requirements as compared to Private Limited Company or a Public Limited Company.
 

What is One Person Company (OPC)?

One Person Company (OPC) is a type of Company that can be formed with only one person as a member and with only one person as a Director. It can be easily incorporated as the requirements are very minimal. It enjoys the same advantages as that of Private Limited Company. It is more suitable for the small business people, startups, small traders, etc. as the risk involved in forming and running One Person Company is very low. It provides an opportunity to all the small entrepreneurs, business people to show there capability in the local market as well as in the foreign market. The Concept of One Person Company is very simple, so one has to do less compliances in operating it as compared to the compliances involved in operating the Private Limited Company or a Public Limited Company.
 

The few features of  One Person Company are:-
  1. It can be easily formed with 1 Member and 1 Director.
  2. The paperwork and time involved in forming One Person Company is less.
  3. No minimum capital required.
  4. It is a separate legal entity.
  5. Liability of the member is limited.
     
How One Person Company registration be done?

One Person Company (OPC) registration can be easily done as per the prescribed procedure under the Companies Act, 2013 . Just Like the Private Limited Company or Public Limited Company, it can be registered with the Ministry of Corporate Affairs. One Person Company gives that required boost to the ideas of the individual to flourish in the economy and to have a better growth opportunity.

One Person Company registration is very simple. The small entrepreneurs or the individuals have to follow the guidelines of registration as mentioned under the Companies Act, 2013. One Person Company registration can be done with only 1 Director and 1 Member. It also requires 1 nominee. The documents required are also very less for One Person Company registration. If all the documents are produced on time, then one can apply for the registration process online on MCA site. The One Person Company registration can be done online which saves time and money of an individual. Along with the application, the entities have to pay a certain fees as prescribed under the Companies Act, 2013.
 

ADVANTAGES

The One Person Company has various advantages and they are as follows:-

  • The One Person Company can be easily formed. It can be incorporated with just 1 Director and 1 Member.
  • The members does not have to bear any liability if any legal case arises on the One Person Company  as their liability is limited.
  • An OPC has a legal identity which is separate from that of a member. An OPC will continue to be in existence even if there is a change in the member. It will pass on to the nominee Director.
  • The owner has the full authority on the business as there is no other person involved in the business. This helps in the decision making process. The owner can take any decision without any hurdles.
  • The One Person Company has lesser compliance to follow as compared to the Private Limited Company or Public Limited Company.
  • There is no need of minimum paid up capital to form a One Person Company.
  • The One Person Company  can easily avail loan from Banks or the Financial Institution. The Banks or the Financial Institution gives the preference to the Company in order to grant loan rather than to any small entrepreneur.
  • The One Person Company is easy to manage. No need to form a quorum for a Board Meeting. It has to hold at least one Board meeting in each half of the calendar year and the gap between two meeting should not be less than 90 days.
  • Basic Criteria For One Person Company Registration
     
One has to fulfill the basic criteria for One Person Company (OPC) registration and they are:
  • Only a natural person can register the One Person Company.
  • One Director is required. The Director should be an Indian resident.
  • One Member required.
  • One Nominee required
  • Digital Signature Certificate
  • Director Identification Number
     
Mandatory Documents

The individual who are opting for the One Person Company registration have to provide the mandatory documents. Let’s see the documents-

  • The proposed name of the Company.
  • The object of the Company. The individual has to provide an object of the company as per the need of the business. The object should be clear and legal.
  • The Director and member have to provide the identity proof and address proof.
     
For the Identity Proof they have to provide –
  1. Pan Card
  2. Passport or Voter Id or Driving Licence.
     
For Address Proof , they have to provide-
  1. Bank Statement
  2. Telephone Bill (should not be older than 2 months)
  3. Electricity Bill (should not be older than 2 months)

Registered office proof of the proposed OPC along with the proof of ownership and a NOC from the owner. To provide Rent agreement, Lease agreement or tax receipt as the address proof when required.

  • Consent of the Director in Form DIR -2 to act as a Director of the Company.
  • A written consent from the nominee.
  • Passport size Photos of the proposed Director, Member and the nominee.
  • Certificate of the Practicing Professionals
     

PROCESS OF ONE PERSON COMPANY REGISTRATION

There are various steps involved in the registration of One Person Company. The steps are as directed –

To obtain Digital Signature Certificate (DSC)

As the process to register the Company is online, so all the required signatory authorities or Directors have to obtain Digital Signature Certificate. The DSC is required to sign the incorporation documents.

To apply for name approval

At first one has to make an online application for name approval. Name application can be applied on the MCA site. This can be done through Part A of a Web Form known as SPICe+. The applicant can propose 2 names at a time.

To obtain details of the nominee

The details of the nominee can be obtain via Form INC 3 and the same should be signed. This Form will be used as an attachment in SPICe+ at the time of filing the documents.

To prepare and submit the Final documents.

After the name gets approved, the applicant have to arrange and prepare the requisite documents per the Companies Act, 2013. Then the final documents are required to be submitted in Part B of SPICe+ form along with eMOA, eAOA and AGILE PRO to MCA. All the final documents must be digitally signed.

Director Identification Number can applied through SPICe+ form itself.

Certificate of Incorporation

If  the authority finds all the documents to be true and fair, then they will issue the Certificate of Incorporation to the Company along with PAN and TAN. They will notify the same to registered email id of the Company.

Important Instructions:
  • Application of EPFO, ESIC, Profession Tax registration(Maharashtra), Opening of Bank Account for the Company is mandatory.
  • Declaration by all Subscribers and first Directors in INC-9 shall be auto-generated in pdf format and will have to submit it only in Electronic form in all cases, except if the limit number of subscriber or directors increases and/or any such subscribers and/or directors has neither DIN nor PAN.
  • If anyone have  applied for the GST number, then they will be allotted the GSTIN.
  • What are the post incorporation process?
  • The Company must print its company name, registered office address and the Corporate Identity Number alongside phone number, email id, fax number (if any), and website (if any), on there letter head and all the other applicable documents. The name plate along with the address of the Company should be fixed at the gate of the Company office.
  • To avail certificate of Commencement of Business, the Company has to file form INC 20A within 180 days from the date of incorporation
  • A first auditor has to be appointed by the Board of Directors of the Company within 30 days of Incorporation. If they fail to appoint the auditor, then an EGM has to be called within 90 days to appoint the first auditor.
Takeaway

One Person Company is one of the most booming type of Company for Indian Economy. It is most profitable venture for the small scale business and the individual. It has the capability to target the required customers and the markets. The Foreign ventures can also invest in it as the compliance and the legal work involved in it is less complicated.
 

FREQUENTLY ASKED QUESTIONS (FAQ’s)
 

What is an OPC?

OPC (One Person Company) is a type of Company that can be formed with only one person as a member and with only one person as a Director. It can be easily incorporated as the requirements are very minimal. 

What are the features of One Person Company?

The few features of  One Person Company are:-

  1. It can be easily formed with 1 Member and 1 Director.
  2. The paperwork and time involved in forming One Person Company is less.
  3. No minimum capital required.
  4. It is a separate legal entity.
  5. Liability of the member is limited.
  6. 1 Director and 1 member required
  7. 1 nominee required
  8. Only an individual can form an OPC
Who can incorporate the One Person Company?

Only an Individual can incorporate the One Person Company. The Individual should have to be an Indian Resident.

Can a Foreign Individual register One Person Company?

No, the Foreign Individual cannot register the One Person Company. Only an Indian resident is permitted to register the One Person Company. 

Who are not eligible to register the One Person Company?

The people who are not eligible to register the One Person Company and they are :-

  1. Minor
  2. Foreign Individual
  3. NRI (Non Resident Indian)
  4. Any person incapacitated by contract
What are the basic requirements to register the One Person Company?

The basic requirements to register the One Person Company-

  • Only a natural person.
  • One Director is required
  • One Member required.
  • One Nominee required
  • Digital Signature Certificate
  • Director Identification Number

Is minimum Capital required to Form One Person Company?

No, minimum capital is not required to form the One Person Company.

What are the Compliances One Person Company has to follow?

The mandatory Compliances One Person Company has to follow are-

-Proper books of accounts should be maintained.
-Financial Statements should be audited
-To hold at least one Board Meeting in each half of the calendar year and the gap between the two Board Meetings should not be less than 90 days.
-Income tax returns has to be filed every year before 30th September.
-Financial Statements in Form AOC-4 and Annual Return in Form MGT 7 has to be filed with ROC

In how many OPC a person can be a member?

In only one OPC, a person can be a member.

Can One Person Company (OPC) be converted into any other Company?

OPC has to convert itself into private or public company if it crosses the required threshold limit. If the the paid up share capital of an OPC exceeds Rs. 50 lakh or its average annual turnover of immediately preceding 3 consecutive financial years exceeds Rs. 2 Crore, then the OPC will have to convert itself into Private Limited Company.
 

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