Overview of One Person Company Registration
A One-Person Company Registration is that has only one person as a member. OPC Registration was introduced to encourage individuals who are capable of starting their own business. OPC enables a sole proprietor to convert his firm into a Limited Liability company and avail the benefits of a Company. It is a business structure that enjoys the benefits of both forms of business i.e. a Sole proprietorship and a company. Thus, it eliminates the hassles of finding the right kind of co-partner/s for starting a business as a registered entity.
As Per Section 2(62) of the Companies Act, 2013, One Person Company means a company that has only one person as a member. One Person Company is bringing the unstructured Proprietorship Business into the structured version of a private company. OPC is opening the path for sole proprietors and Start-Ups.
Benefits of One-Person Company Registration
- One Person Can Start The Business : Under OPC, one person can start the business with very little compliance. Due to fewer compliances, a person gets more time to focus on his business and key areas.
- Complete Control By The Individual : The control remains in the hand of one person only.
- Limited Liability : In case of One Person Company, the member of OPC has limited liability.
- Separate Legal Entity From Its Member : Being a company, OPC has a separate legal existence from its member.
- Easy Compliance And Tax Flexibility : An individual has to follow easy compliance and avails the benefit of tax availability too.
- Benefits For Small Scale Industries : OPC avails the benefits provided to Small scale industries like easy funding, less compliance, loans at a lower interest rate, etc.
What are the Eligibility Criteria for One-Person Company Registration?
- A natural person can form OPC who is a resident of India in the preceding calendar year.
- Only 1 member can form an OPC.
- The Name should be unique and should not be similar to any other existing company and trademark.
- An individual cannot incorporate more than 1 OPC or
- An individual cannot be the nominee of more than 1 OPC.
- There must be a least 1 director.
- In the case of OPC, the threshold limit of paid-up capital is Rs 50 lakh and the Average Annual turnover is Rs 2crore in the immediately preceding financial year. However, as per latest budget now there is no restriction on paid up and turnover limit.
- One Person Company must include in its name (OPC) Private Limited.
- Pre-condition to indicate the name of the other individual as a nominee. As in the event of the death of the subscriber, a nominee becomes a member of the One Person Company.
What Documents are Required for OPC Registration?
Below-mentioned documents are required for OPC Registration:-
For DSC Application
- Passport size photo of the applicant.
- Copy of Id and Address Proof.
- Email Id and Phone number
- Specimen Signature
Documents Required For SPICe+ Form
- Identity proof
- Address proof & Identity proof and of the nominee and the subscriber
Note-For Residential proof, the applicant can provide any of the following documents:-
- Copy of Current Bank Account Statement, Phone Bill, or Electricity Bill)
- Copy of Rent agreement and No-objection Certificate from the property owner.
- If the property is owned-Copy of the sale deed.
- Memorandum of Association and Articles of Association
- Declaration by the Subscribers and Directors
- Proof of Office Address
- Copy of Electricity or Utility Bills. However, it should not be older than 2 months.
- Nominee’s Consent in Form INC-3
- Disclosure of Director’s Interest and any other document (if required).
Inclusions
- DIN for 1 Director
- Digital Signature For 1 Director
- Name approval
- MOA/AOA
- ROC registration Fees
- Company Pan Card
FAQs
What is a One Person Company under the Companies Act, 2013?
An OPC is a company that is incorporated by a single person.
What is the difference between an OPC and a sole proprietorship?
The most remarkable difference between both is that a sole proprietorship forces unlimited liability on its member, whereas in the case of an OPC the member has limited liability. A sole proprietorship is not given the status of a separate legal entity like that of an OPC. Also, an OPC has a perpetual existence, unlike a sole proprietorship that gets dissolved on the death or the retirement of its members.
What is the eligibility to become a member of an OPC?
The member of an OPC should be a natural person who is a citizen of India. It is also pertinent to note that the member should also be a resident of India who has resided in India for not less than a period of 180 days immediately preceding the financial year.
Is it compulsory to elect a nominee in an OPC?
Yes, the sole member of the OPC has to mandatorily elect a nominee at the time of registration of the company. The consent of the nominee is taken in Form INC-3.
Can a person be a member of more than OPC?
No, a person can be a member of only one OPC at any given time. However, a member of an OPC is not forbidden from becoming a member of any other private company.
What are the compliances that need to be adhered to while registering an OPC?
The OPC should conduct at least one board meeting every half of the calendar year and the time gap between the two meetings should not be less than 90days. The book of accounts is to be maintained. The financial statements must be subjected to regular audits. The income tax returns must be duly submitted. The financial statements in Form AOC-4 and the ROC Annual returns in Form MGT are to be furnished.
Who is not eligible to incorporate an OPC?
A citizen of a foreign country, a minor, A non-resident of India, any person who does not have the capacity to enter into contractual obligations is not eligible to become a member of an OPC.
How many Directors can an OPC have?
An OPC is incorporated with a single member and a single director. Also, there can be a single member who can act both as the member and the director. An OPC can have a minimum of 1 director and a maximum of 15 directors.
What are the documents required for registering an OPC?
DIN (Director Identification Number), DSC (Digital Signature Certificate), and PAN (Permanent Account Number) of the director and shareholder. Passport size photographs of the sole member and director. Identity and Address proofs of the shareholder and the director. Proof of address of the registered office of the OPC. The forms stipulated by the Companies Act, 2013.
Can an OPC be converted into a private or a public limited company?
Yes, an OPC can be converted to a private limited company by passing a resolution or can be converted mandatorily. The voluntary conversion is done after passing a resolution in the company. The voluntary conversion however cannot happen within 2 years after the incorporation of the OPC. The mandatory conversion takes place when the paid-up share capital of the company exceeds ₹50,000 · Three consecutive financial years have a yearly turnover of more than ₹2 crores Under such circumstances, the OPC is converted to a public or a private limited company within 6 months from the date on which the above stated conditions have arisen.
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