One Person Company

Overview of One Person Companies (OPCs)

The Indian business ecosystem has undergone a revolutionary shift with the introduction of One Person Companies (OPCs). Gone are the days when entrepreneurs required multiple founders to establish a company. The Companies Act,2013, introduced the OPC concept, allowing individuals to form a limited liability company and operate independently.

Prior to 2013, a minimum of two directors and members were mandatory for company registration. The OPC structure eliminates this barrier, making it easier than ever to launch your business venture and enjoy the benefits of a limited liability company.

The OPC structure provides a solid foundation for aspiring entrepreneurs. It empowers individuals to bring their business ideas to life with the advantages of limited liability and a separate legal entity. As your business flourishes, you can seamlessly convert your OPC into a private company in the future to accommodate growth.

Contact us today to learn more about our OPC registration services.

How to Register One Person Company in India

Easy Steps for One Person Company Registration in India

1. Obtain a Digital Signature Certificate (DSC)

A Digital Signature Certificate (DSC) serves as a digital method for document verification, typically valid for one or two years. You can obtain a DSC directly from Government Certifying Agencies via Aadhar e-KYC-based verification or by submitting supporting documents.

2. Apply for Name Approval using SPICe+ Part A

Part A of the SPICe+ form facilitates 'Name Reservation', allowing for the submission of two proposed names and one re-submission (RSUB).

3. Apply for Company Registration using SPICe+ Part B

Upon name approval, submit Part B of the SPICe+ form on the MCA portal along with required documents:

1. Digital Signature Certificate (DSC)
2. SPICe-MoA
3. SPICe-AoA
4. Declarations from Director and Nominee
5. Requisite fee

4. Open a Bank Account

Apply for GSTIN, EPFO, ESIC, Profession Tax, and bank account opening simultaneously through AGILE-PRO-S (Form INC-35).

5. File for Commencement of Business Certificate

Within 180 days of company incorporation, file for the "Commencement of Business Certificate" via Form INC-20A

Features of One Person Company

Key Features of One Person Company (OPC)

1. Easy Succession

Despite being managed by a single individual, OPC offers options for perpetual succession. In the event of the member's death, the nominee can take over the company's operations.

2. Limited Liability

Members of an OPC enjoy limited liability, as the company is treated as a separate legal entity. In cases of bankruptcy, creditors can only sue the company, not the director, for outstanding debts.

3.Sole Directorship and Shareholder

OPC registration allows a single member to act as the director, solely responsible for managing the company's day-to-day activities. Ownership of Property: As a separate legal entity, OPC has the right to hold property and assets in its name. These assets, including machinery, factories, residential properties, and buildings, cannot be claimed by any other individual.

Advantages of One Person Company (OPC)

1. Limited Liability

OPC's separate legal entity ensures that liability is limited to shares, shielding you from personal liability for company losses.

2. Less Incorporation Compliances

OPCs have fewer compliance requirements compared to Private Limited or Public Companies, simplifying the incorporation process.

3.Smooth Management

Similar to Sole Proprietorship, OPCs are owned and managed by a single person, facilitating effortless business management and decision-making.

4. Perpetual Succession

Despite having only one member, OPCs feature continuous succession. The nominee appointed during incorporation can seamlessly take over in the absence of the sole member.

5. Availability of Funds

OPCs can secure funds from banks and financial institutions through debt-based funding options.

Disadvantages of One Person Company (OPC)

1. Limited Expansion Opportunities

OPC structure is ideal for small businesses but may restrict expansion as it does not allow for the addition of members or shareholders as the company grows.

2. Limited Investment Activities

OPCs are restricted from conducting Non-Banking Financial Investment activities, including investments in securities of other corporates.

3. Limited Resources

The OPC structure imposes constraints on business operations, particularly in management and resource allocation. Additionally, being primarily led or created by a single individual may limit the pool of skills and knowledge compared to other entity types.

Documents required for OPC Company Registration

1. Identity Proof and Address Proof

• Provide Passport, Aadhar card, Voter ID, or Driver's License of Directors /Shareholders.
• Submit PAN card for verification.
• Furnish utility bills or Bank Statements as address proof.

2. Proof of Registered Office

• If you own the property, submit any utility bill (e.g., electricity bill) or corporation tax receipt dated within 30 days.
• If using someone else’s property, provide a Rental Agreement or No Objection Certificate (NOC).

3. Memorandum of Association (MOA) and Articles of Association (AOA)

• MOA outlines the company's objectives and scope of activities.
• AOA defines internal regulations and governance structures.

4. Declaration and Consent of the proposed Director

• Form DIR-2: Official consent to assume the Director role within the prospective company.
• Form INC-9: Official declaration.

5. Declaration and Consent of the Nominee

• Submit Form INC-3 along with PAN card and Aadhar Card as the official consent of the Nominee.

Compliance Guidelines for One Person Company (OPC)

1. For Directors/ Shareholders

• An OPC must have at least one Director (shareholder) and can appoint a maximum of 15 Directors.
• If exceeding this maximum limit, a formal resolution must be filed to increase the number of directors allowed.
• During OPC Registration, it is mandatory to appoint a nominee.

2. For One Person Company

• Board Meetings: Conduct a minimum of two board meetings annually, with at least one in each half of the year, ensuring a minimum of 90 days separating each session.
• Filing of Annual Return: File Annual Returns using form MGT-7 at the end of the Financial year.
• Filing of Financial Statements: Submit Financial Statements through form AOC-4 at the end of the Financial year.
• Filing of ADT-1: File Form ADT-1 within 15 days of appointing the subsequent auditor.
• Auditor Appointment: Appoint the first auditor within 30 days of incorporation, who will serve until the end of the first Annual General Meeting.
• Filing of DIR-3 KYC: Submit Form DIR-3 KYC to disclose Director details before 30th September of the immediate financial year.

3. Minimum Capital Requirement

• No minimum paid-up capital requirement exists for registering an OPC in India. However, the minimum authorized capital required is Rs. 1,00,000 (One Lakh).

4. Tax Rates

• The applicable Tax rate for OPC is 25% plus cess and surcharge.
• Surcharge, ideally 12%, is charged on the calculated income tax amount.
• Health and Education cess at 4% is levied on the total income tax plus surcharge.

Please note: These mentioned compliances serve as a starting point, and additional requirements specific to your business may apply. Stay informed about relevant compliances to ensure seamless business operations.

Cost of One Person Company Registration

The expenses associated with One Person Company (OPC) registration may vary depending on the authorized capital and the state of incorporation. Typically, these costs include

1. DSC Fee

Cost of obtaining Digital Signature Certificates (DSC) for partners.

2. DIN Fee

Applicable fees for obtaining Director Identification Numbers (DIN).

3. Name Approval Fee

Charges incurred for name reservation during the registration process.

4. Registration Fee

Registration fee varies based on the authorized capital of the company.

5. Professional Charges

Fees for legal support and facilitation services during the registration process.

Checklist for Registration

Ensure a smooth OPC registration process with this concise checklist:

1. Obtain a Digital Signature Certificate (DSC) for the Director.
2. Obtain consent from both the Director and the Nominee.
3. Draft the e-Memorandum of Association & e-Articles of Association.
4. Reserve your Company Name.
5. Apply for registration through the SPICe+ form.
6. Obtain a Certificate of Incorporation from the RoC.
7. Acquire PAN & TAN for your Company.
8. Open a Current bank account for your Company.
9. Follow post-incorporation compliances diligently.