Overview of One Person Company
Nowadays, obtaining One Person Company Registration acts as a forward-thinking notion for those individuals who either wants to have their own small business or are full with entrepreneurial dreams. However, at the same time these individuals do not have any resources, means, or time to attract more partners for the execution of the business plan.
Further, the concept of OPC Registration is recognised as a blend of the conventional Private Limited Company and Sole proprietorship.
Therefore, an OPC company benefits from the best of two worlds.
Concept of One Person Company
The concept of One Person Company (OPC) is defined under section 2 (62) of the Companies Act 2013. Further, this business structure requires only one individual who will act both the director and owner of the company. That means this individual has the ultimate authority regarding affairs and operations of the company.
Benefits of OPC Registration
In India, the benefits of incorporating an OPC are as follows:
- Prescribed No Minimum Capital Requirement;
- Owner enjoys the benefit of Limited Liability and is liable only to the extent of capital contributed by him/ her;
- Provides Fewer Compliance in comparison to any other business structure;
- Requires Less Paperwork;
- Benefits from Perpetual Succession;
- Offers Greater Credibility and Consumer Satisfaction;
- Minimises the Chance of Disputes;
- Offers benefit to the Small-scale Industries;
- Privileges under the Foreign Trade Policy;
Minimum Requirements for One Person Company Registration
The minimum requirements to incorporate a One Person Company are as follows:
- The person who is incorporating One Person Company needs to be both Resident and Citizen of India;
- Business Formats such as a Private Company and LLP cannot join an OPC;
- The promoter must select a nominee during incorporation;
- The minimum authorized capital for an OPC is Rs 1 Lakh;
- Restricts the functioning of a minor as member;
- Must not exceed the Annual Turnover of Rs 2 crore and Paid-up Capital of Rs 50 lakhs;
- Needs to have at least one nominee and one director;
Forms for Obtaining OPC Registration
The forms required for the registration of a One Person Company are as follows:
- Application for Company Registration;
- Digital Signature Form;
- Declaration of Promoter in the MCA form INC 9;
- Declaration of the Promoter-Non-Deposit under FEMA and SEBI;
- Consent of Director in the form DIR 2;
- MOA and AOA of the Subscriber Sheet;
- No-Objection Certificate from the Actual Owner;
Documents Required for Incorporating a One Person Company
In India, the documents needed for the registration of a One Person Company are as follows:
- PAN Card;
- Latest Passport-sized Photograph;
- Identity Proof in the form of Aadhaar Card/ Voter Identity Card/ Driving License of the owner;
- Copy of the Rent Agreement;
- Utility Bill in the form of Electricity Bill or Water Tax Receipt;
- Sale Deed;
- No-Objection Certificate from the Landlord;
Process to Register a One Person Company
The steps included in the process of OPC registration are as follows:
Obtain DSC and DIN
The foremost step in the process is to acquire a DSC and DIN for the director of the company.
Apply for Name Approval
Now, the applicant needs to file Form INC 1 for the reservation of the company’s name. Also, the name must have suffix “OPC Pvt Ltd.”
Further, the two ways of reserving a name are firstly, by filing an application form in SPICe 32 and secondly, by using RUN (Reserve Unique Name) Web services provided by MCA (Ministry of Corporate Affairs).
Application for the OPC Registration
Now, the promoters need to apply for registration with the ROC within whose territorial jurisdiction the registered office of the company is located.
Further, the Application for the Incorporation needs to be filed in the Form INC 2.
Signing of MOA and AOA
In the next step, the sole member of the company needs to sign the MOA (Memorandum of Association) and AOA (Article of Association).
Also, the said member needs to provide details, such as his name, occupation, address, designation, in the presence of at least one witness. Further, the witness needs to provide his/ her basic details and signature as well.
Affidavit by Director and Subscriber
Now, the sole member, who is a subscriber of MOA and AOA, requires to provide a duly signed affidavit in the form INC 9.
Particulars of Subscribers
Now, the applicant needs to file the particulars of subscription with ROC (Registrar of Company) during incorporation.
Declaration by Professionals
After that, a declaration made either by an CA/ Advocate/ Cost accountant/ or CS in practice needs to be filed in Form INC 8.
Submission of the Forms and Documents
In this step, the applicant requires to annex SPICe Form, SPICe MOA, and SPICe AOA, together with the DSC of the Director. Further, the same needs be uploaded on the official MCA website for the approval as well.
After, uploading the required documents, Form 49 A and 49 B will automatically be generated, which will later be used for the generation of TAN and PAN.
Also, the said MCA forms are required to be uploaded to the MCA portal after affixing the Digital Signature of the proposed Director.
Issuance of the Certificate of Incorporation
After the completion of Process, the ROC will issue COI (Certificate of Incorporation) for the commencement of the business operations.
Mandatory Annual Compliances for OPC
The mandatory annual compliances for a One Person Company are as follows:
- Must hold a minimum of 2 Board Meetings;
- Statutory Audit by a Practising Chartered Accountant;
- Appointment of Auditor;
- Filing of ITR;
- Annual filings to ROC;
- Maintenance of Minutes and Statutory Registers;
- Form AOC 4 for the Financial Statement;
- Form MGT 7 for an Annual Return;
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Frequently Asked Questions
Yes, a single individual can start an OPC in India.
No, only natural persons are allowed to form an OPC in India.