One-Person Company Registration

Registering a One Person Company (OPC) is favoured among entrepreneurs who desire limited liability and a distinct legal identity. OPC is a unique business structure that permits a single person to function as a company, giving them the benefits of limited liability while retaining complete control. In an OPC, the individual serves as both the director and shareholder, merging the advantages of a sole proprietorship with the legal protection of a private limited company. At Tej and Associates, we specialise in simplifying the OPC registration process, ensuring that entrepreneurs can smoothly navigate the complexities of legal formalities. Our experienced team is dedicated to assisting you at every step, from document preparation to filing, we offer expert guidance to help you make informed decisions regarding your OPC setup.

One Person Company (OPC)

As per section 2(62) of the Companies Act, 2013, “One Person Company” means a company which has only one person as a member. OPC is a package that combines the benefits of Sole Proprietorship and company form of business. One Person Company of sole-proprietor and company form of business has been provided with concessional /relaxed requirements under the Companies Act, 2013.

Introduction to One Person Company (OPC)

One Person Company (OPC) registration in India was introduced as a concept under the Companies Act of 2013, enabling a single individual to establish a company and enjoy the combined benefits of both a sole proprietorship and a traditional company structure. This concept became available with the implementation of the Companies Act in 2013. The primary objective behind creating one-person companies was to foster entrepreneurship and encourage the formalisation of Micro, Small, and Medium Enterprises (MSMEs). According to Section 2(62) of the Companies Act 2013, a company can be formed with just one director and one member, and interestingly, these roles can be held by the same individual.

Eligibility Criteria

Before you go ahead and register a one-person company (OPC), it’s crucial to understand the specific eligibility criteria and limitations that govern its formation. The Companies Act sets out clear requirements that must be met to ensure that the individual promoting the OPC is eligible to do so.

• Natural Person and Indian Citizen: Only a natural person who is an Indian citizen can establish an OPC. Legal entities like companies or LLPs cannot create an OPC.
• Resident in India: The promoter must be a resident in India, meaning they should have lived in India for at least 182 days during the previous calendar year.
• Minimum Authorised Capital: The OPC must have a minimum authorised capital of Rs 1,00,000, the amount stated in the company’s capital clause during the registration.
• Nominee Appointment: The promoter must appoint a nominee during the OPC’s incorporation. This nominee would become a member of the OPC in the event of the promoter’s death or incapacity.
• Restrictions on Certain Businesses: Businesses involved in financial activities such as banking, insurance, or investments cannot be established as OPCs.
• Conversion to Private Limited Company: If the OPC’s paid-up share capital exceeds 50 lakhs or its average annual turnover surpasses 2 Crores, it must be converted into a private limited company to comply with the regulatory requirements for larger companies.

It’s worth noting that an individual can establish only one OPC, and an OPC cannot have a minor as its member.

Advantages of OPC – One Person Company

Advantages of One Person Company (OPC) include the following:

• Legal Status: An OPC obtains a separate legal entity status, safeguarding the individual who founded it from personal liability for company losses.
• Easy Fundraising: Being a private company, OPCs find it easier to raise funds through venture capitalists, angel investors, and banks compared to proprietorship firms.
• Reduced Compliance: OPCs enjoy certain exemptions from compliance requirements under the Companies Act, 2013, simplifying administrative obligations.
• Simple Incorporation: OPCs can be established with just one member and one nominee, with the member also serving as the director. No minimum paid-up capital requirement simplifies the incorporation process.
• Efficient Management: With a single person managing the OPC, decision-making is swift, leading to efficient company management without conflicts or delays.
• Perpetual Succession: OPCs maintain perpetual succession, ensuring the company’s continuity even with only one member.

In conclusion, OPCs offer several advantages, including limited liability, ease of fundraising, reduced compliance, straightforward incorporation and management, and perpetual succession.

Disadvantages of OPC – One Person Company

While OPCs offer advantages, there are also limitations:

• Suitable for Small Businesses: OPCs are primarily suitable for small-scale businesses as they can only have one member. This limits their ability to raise additional capital as the business expands.
• Restriction on Business Activities: OPCs are restricted from engaging in certain activities, such as non-banking financial investments and charitable objectives.
• Ownership and Management: There’s a lack of clear distinction between ownership and management in OPCs, as the sole member can also be the director. This can potentially lead to ethical concerns or conflicts of interest.

Required Documents

Several essential documents must be prepared and submitted to the Registrar of Companies (ROC) as part of the OPC registration process:

• Memorandum of Association (MoA)
• Articles of Association (AoA)
• The nominee’s consent, along with their PAN card and Aadhaar card, must be submitted via Form INC-3.
• Proof of Registered Office
• The proposed director should furnish a declaration in Form INC-9 and their consent in Form DIR-2.
• A declaration by a qualified professional certifying that all necessary legal compliances have been adhered to.

Registration of One Person Company (OPC) in India

In India, the registration of a One Person Company (OPC) is facilitated through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form, which has replaced the previous application forms for company incorporation. The registration process for an OPC consists of two parts:

• Part A: This initial section of the SPICe+ form is dedicated to securing approval for the desired company name and applying for the Director Identification Number (DIN) or Permanent Account Number (PAN) for the proposed director.
• Part B: The subsequent segment, known as Part B, involves furnishing incorporation-related details. Here, essential information such as the registered office address of the OPC, details about share capital, particulars of the director, and information about the shareholder is provided.

Here are the steps involved in the OPC registration.

Step 1: Obtain a Digital Signature Certificate (DSC)

Secure a Digital Signature Certificate (DSC) for the intended director of the OPC. The DSC is used for electronically signing crucial documents.

Step 2: Obtain Director Identification Number (DIN)

Acquire a Director Identification Number (DIN) for the proposed director from the Ministry of Corporate Affairs (MCA).

Step 3: Name Reservation

Apply for name reservation through the MCA portal using Form SPICe+ (Part A). Ensure that the chosen name for your company is distinct and does not resemble any existing company or trademark.

Step 4: Prepare MOA and AOA

Draft the Memorandum of Association (MOA) and Articles of Association (AOA) for your company. These documents define the company’s objectives and internal rules.

Step 5: File the Forms

File the necessary forms with the MCA for OPC registration. Attach the relevant documents to the SPICe+ form, including MOA, AOA, declarations, proof of the registered office, nominee appointment, and other documents as required by the MCA.

Step 6: Certificate of Incorporation

Upon approval by the ROC and verification of compliance requirements, the ROC will issue a Certificate of Incorporation, signifying the successful registration of your One Person Company. Notably, the PAN number (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) are generated automatically during the incorporation process, eliminating the need for separate applications. With this Certificate of Incorporation, your OPC is officially recognized and ready to commence its operations in India.

Why Tej and Associates for OPC Registration?

Tej and Associates is the ideal partner for One Person Company (OPC) registration for several compelling reasons. With years of expertise in company registration and a deep understanding of the regulatory landscape, Tej and Associates simplifies the often complex OPC registration process. We offer expert guidance, from name reservation to document preparation and submission. Our commitment to accuracy and compliance guarantees that your OPC registration adheres to all legal requirements, while our dedicated support team is readily available to address any queries or concerns you may have. Get started now and embark on your entrepreneurial journey with confidence!

Post-Incorporation Formalities for OPC

Following the successful incorporation of a One Person Company (OPC), specific compliance formalities must be adhered to, akin to those applicable to private limited companies. Our experts are ready to assist you in fulfilling OPC compliance requirements, ensuring that your business remains in full legal compliance.  

KEY FEATURES

1. OPCs are not proprietorship concerns and hence, they give a dual entity to the company as well as the individual, guarding the individual against any pitfalls of liabilities. This is the fundamental difference between OPC and sole proprietorship. 
2. Unlike a private limited or public limited company, OPCs need not bother too much about compliances 
3. Businesses currently run under the proprietorship model could get converted into OPCs without any difficulty . 
4. OPCs require minimal capital, to begin with. Being a recognized corporate, it could well raise capital from others like venture capital financial institutions, etc., thus graduating to a private limited company 
5. A One Person Company needs to have a minimum of one director. It can have directors up to a maximum of 15 which can also be increased by passing a special resolution as in case of any other company. But Shareholder should be one 
6. One person cannot incorporate more than one OPC or become a nominee in more than one OPC . 
7. OPC is a separate legal entity having perpetual succession, limited liability . 
8. OPC is exempt from many complicated compliances such as exemption in general meetings, board meetings, quorums, voting inclusion of cash flow statements in financial statements, mandatory rotation of an auditor. It is to be noted that a Board meeting must be conducted if there is more than one director. OPC is also exempted from transacting business via postal ballot. Further, the appointment of a company secretary is also not essential for an OPC. The annual return of an OPC can be signed by its director in case of no company secretary.

Documents Required for OPC Incorporation

1. Director Identification Number (DIN) and DSC for all the Director(s) & Promoter 
2. PAN, ID Proof and Address Proof of a Promoter and all the Director(s) along with Photo 
3. Application for Name Approval in R.U.N and Approval of the Same [Note that Name desired should not resemble the name of existing registered company and shall not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950) . 
4. Drafting of Documents and Filing of e-Forms namely MOA/AOA
5. Proof of office/registered address (Property Document if self-owned or Lease/Rental Agreement) and latest copies of utility bills 
6. Brief Writeup on the nature of business to be carried on in the proposed OPC. 

Conclusion

Tej and Associates offers a broad range of services beyond OPC, assisting Indian owners    (Partnership, Proprietary concern, LLP, Pvt Ltd,Trusts/Societies), foreign owners (Subsidiary Company, Branch/Liaison Office), and special entities ( Section 8 Company, AOP) in ensuring compliance and efficiency. Contact us now and take the first step toward building your entrepreneurial dream!