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One Person Company Registration
One Person Company Registration
One-Person Company (OPC) Registration
- Filing Champs specializes in simplifying the registration process for One-Person Companies (OPCs).
OPCs are favored by entrepreneurs seeking minimal liability and a separate legal identity. - This unique corporate structure allows a single individual to operate as a company, enjoying limited liability while retaining full control.
- In an OPC, the individual serves as both the director and shareholder, blending the advantages of a sole proprietorship with the legal protections of a private limited company.
- Filing Champs’ experienced team assists entrepreneurs through every step of the process, from document preparation to filing.
Expert guidance is provided to help entrepreneurs make well-informed decisions about their OPC setup. - Contact Filing Champs today to take the first step towards realizing your entrepreneurial goals.
An Overview of One-Person Companies (OPCs)
- One Person Company (OPC) registration in India was introduced under the Companies Act of 2013.
- It enables a single individual to establish a company, combining aspects of both sole proprietorship and standard company structures.
- The concept aims to promote entrepreneurship and formalize Micro, Small, and Medium Enterprises (MSMEs).
- OPCs can be formed with just one director and one member, who can be the same person.
Eligibility Criteria for One-Person Company (OPC) Formation
- Natural Person and Indian Citizen: Only individuals who are natural persons and citizens of India can establish an OPC. Legal entities like corporations or limited liability partnerships are not eligible to form an OPC.
- Resident in India: The promoter must be a resident of India, meaning they must have spent at least 182 days in India in the preceding calendar year.
- Minimum Authorized Capital: An OPC must have a minimum authorized capital of Rs 1,000,000, as specified in the company’s capital clause during registration.
- Nominee Appointment: The promoter must appoint a nominee throughout the OPC’s incorporation process. This nominee will step in if the promoter dies or becomes incapacitated.
- Restrictions on Certain Businesses: Financial institutions such as banks, insurance companies, and investment firms cannot be formed as OPCs.
- Conversion to Private Limited Company: If the OPC’s paid-up share capital exceeds 50 lakhs or its average annual turnover exceeds 2 crores, it must convert into a private limited company to meet the legal requirements for larger businesses.
Advantages of One Person Company (OPC)
The benefits of a one-person company (OPC) include the following:
- Independent Legal Entity: OPCs have their own legal entity status, shielding the owner from personal liability for company debts.
- Easy Fundraising: Being a private company, OPCs have better access to funding from venture capitalists, angel investors, and banks compared to proprietorship firms.
- Reduced Compliance: OPCs enjoy exemptions from certain compliance requirements under the Companies Act, 2013, simplifying administrative tasks.
- Simple Incorporation: OPCs require only one member and one nominee for formation, with the member also acting as the director. The absence of a minimum paid-up capital requirement streamlines the incorporation process.
- Efficient Management: With a single person at the helm, decision-making in OPCs is swift, leading to effective corporate management devoid of conflicts and delays.
- Perpetual Succession: OPCs have perpetual succession, ensuring the company’s continuity even if there is only one member.
Disadvantages of One Person Company (OPC)
While OPCs offer advantages, there are several limitations:
- Suitability for Small Businesses: OPCs are most suitable for small businesses due to their restriction to having only one member. However, this limitation may hinder their ability to secure more funding as the company expands.
- Restriction on Business Activities: OPCs are restricted from participating in certain activities such as non-banking financial investments and philanthropic endeavors.
- Ownership and Management: In OPCs, there is often no clear distinction between ownership and management since the sole member may also serve as the director. This situation can raise ethical concerns and potentially lead to conflicts of interest.
Necessary Documents for Registration
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Nominee’s consent, PAN card, and Aadhaar card submitted via Form INC-3.
- Proof of Registered Office
- Declaration from proposed director in Form INC-9 and consent in Form DIR-2.
- Declaration from a qualified professional certifying legal compliances.
Registration of One Person Company (OPC) in India
In India, registering a one-person business (OPC) is streamlined through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form. This form has replaced older application forms for business incorporation.
The registration process for an OPC consists of two parts:
- Part A: This section involves obtaining approval for the company name and applying for the Director Identification Number (DIN) or Permanent Account Number (PAN) for the prospective director.\
- Part B: Known as Part B, this section requires providing incorporation information, including the OPC’s registered office address, share capital details, director information, and shareholder details.
Here are the steps for OPC registration.
- Obtain Digital Signature Certificate (DSC): Get a DSC for the desired director to electronically sign important documents.
- Obtain Director Identification Number (DIN): Obtain a DIN for the intended director from the Ministry of Corporate Affairs.
- Name Reservation: Fill out Form SPICe+ (Part A) and submit it through the MCA portal to reserve a unique name for your OPC.
- Prepare MOA and AOA: Create a Memorandum of Association (MOA) and Articles of Association (AOA) outlining your company’s objectives and internal rules.
- File the Forms: Fill out relevant forms and submit them to the MCA for OPC registration. Attach all necessary documents, including MOA, AOA, declarations, evidence of registered office, and nominee appointment.
- Certificate of Incorporation: Once approved, the ROC will issue a Certificate of Incorporation for your OPC. PAN and TAN are generated during incorporation, streamlining the process. With this certificate, your OPC is officially recognized and ready to operate in India.
Why Choose Filing Champs for OPC Registration?
Filing Champs offers simplified OPC registration with years of expertise in company registration and a deep understanding of regulations. From name registration to paperwork filing, we provide experienced assistance. Our commitment to accuracy and compliance ensures that your OPC registration meets all legal requirements. Plus, our dedicated support team is available to address any questions or concerns you may have.
Post-Registration Procedures for One-Person Company (OPC)
After successfully incorporating a One Person Company (OPC), several compliance formalities need to be adhered to, akin to those required for private limited businesses. Our team of professionals is prepared to assist you in meeting OPC compliance standards and ensuring your organization remains fully compliant with the law.
Proprietorship vs Partnership vs Limited Liability Partnership (LLP) vs Company
| Features | Proprietorship | Partnership | LLP | Company |
|---|---|---|---|---|
| Definition | Business managed by one person | Agreement between multiple parties | Combination of partnership and company | Registered entity with limited liability |
| Ownership | Sole Ownership | Min 2 Partners, Max 50 Partners | Designated Partners | Min 2 Directors, Min 2 Shareholders, Max 15 Directors, Max 200 Shareholders. For One Person Company: 1 Director, 1 Nominee Director |
| Registration Time | 7-9 working days | – | – | – |
| Promoter Liability | Unlimited Liability | Limited Liability | Limited Liability | Limited Liability |
| Documentation | MSME, GST Registration | Partnership Deed | LLP Deed, Incorporation Certificate | MOA, AOA, Incorporation Certificate |
| Governance | – | Under Partnership Act | Under LLP Act, 2008 | Under Companies Act, 2013 |
| Transferability | Non Transferable | Transferable if registered under ROF | Transferable | Transferable |
| Compliance Requirements | Income tax filing if turnover is more than Rs.2.5 lakhs, ITR 5, Form 11, Form 8 | ITR 5 | ITR 5, ITR 6, MCA filing, Auditor’s appointment | ITR 6, MCA filing, Auditor’s appointment |
OPC Registration FAQ's
An OPC, or One Person Company, allows a single individual to operate as a company, blending the benefits of a sole proprietorship with the legal protection of a private limited company.
The concept of OPC was introduced under the Companies Act of 2013.
Eligibility requires being a natural person and Indian citizen, with residency in India for at least 182 days in the previous year. Minimum authorized capital of Rs 1,00,000 and a nominee appointment are also necessary.
No, an OPC cannot engage in financial activities like banking, insurance, or investments.
In such cases, the OPC must convert into a private limited company to comply with regulatory requirements.
An individual can establish only one OPC.
No, an OPC cannot have a minor as its member.
Advantages include limited liability, easy fundraising, reduced compliance, simple incorporation, efficient management, and perpetual succession.
The registration process involves obtaining a Digital Signature Certificate (DSC), Director Identification Number (DIN), name reservation, preparing MOA and AOA, filing forms, and obtaining a Certificate of Incorporation.
Required documents include MOA, AOA, nominees consent, proof of registered office, declarations, and a compliance certificate.
A DSC is used for electronically signing documents during the registration process.
A DIN is a unique identification number for directors, required for legal compliance and governance.
A nominee is appointed to take over the OPC in the event of the director's death or incapacity.
The Certificate of Incorporation is an official document issued by the ROC after approval, signifying the successful registration of an OPC.
Filing Champs offers expert guidance, simplifies the registration process, ensures compliance, and provides dedicated support to make OPC registration hassle-free.
Post-incorporation formalities may include filing a notice regarding the registered office within 30 days after incorporation.
Filing Champs experts are ready to assist in fulfilling OPC compliance requirements, ensuring your business remains in full legal compliance.
