Explore all the details you need about One-Person Company (OPC) Registration, tailored for your needs.
Registering a One-Person Company (OPC) is favored 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 Solocorp Verifocus Legal LLP, we specialize in simplifying the OPC registration process, ensuring that entrepreneurs can smoothly navigate the complexities of legal formalities with reasonable One-Person Company registration fees. Our experienced team is dedicated to assisting you at every step, from document preparation to filing, offering expert guidance to help you make informed decisions regarding your One-Person Company Registration.
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 formalization 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. Simply, OPC Company registration allows a single person to set up a limited liability company in India. The following describes the eligibility and procedure to register one person company.
Before you go ahead and engage in OPC registration process, 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.
Only a natural person who is an Indian citizen can establish an OPC. Legal entities like companies or LLPs cannot create an OPC.
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.
The OPC must have a minimum authorized capital of Rs 1 00,000, the amount stated in the company's capital clause during the OPC Company registration.
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.
Businesses involved in financial activities such as banking, insurance, or investments are not eligible for OPC company registration.
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.
An OPC obtains a separate legal entity status, safeguarding the individual who founded it from personal liability for company losses.
Being a private company, OPCs find it easier to raise funds through venture capitalists, angel investors, and banks compared to proprietorship firms.
OPCs enjoy certain exemptions from compliance requirements under the Companies Act, 2013, simplifying administrative obligations.
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.
With a single person managing the OPC, decision-making is swift, leading to efficient company management without conflicts or delays.
OPCs maintain perpetual succession, ensuring the company's continuity even with only one member.
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.
OPCs are restricted from engaging in certain activities, such as non-banking financial investments and charitable objectives. Hence, companies with these business activities are not eligible for OPC company registration.
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.
Several essential documents must be prepared and submitted to the Registrar of Companies (ROC) as part of the One Person Company registration process:
In India, OPC company registration is facilitated through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form, which simplifies the incorporation process. The process is divided into two parts: Part A for name approval and DIN/PAN application, and Part B for incorporation details. Below are the detailed steps for OPC registration online.
Secure a Digital Signature Certificate (DSC) for the intended director of the OPC. The DSC is utilized for electronically signing crucial documents.
Acquire a Director Identification Number (DIN) for the proposed director from the Ministry of Corporate Affairs (MCA).
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.
Draft the Memorandum of Association (MOA) and Articles of Association (AOA) for your company. These documents define the company's objectives and internal rules.
File the necessary forms with the MCA to register One Person Company. 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.
Upon approval by the Registrar of Companies (ROC) and verification of compliance requirements, the ROC will issue a Certificate of Incorporation. The PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) are generated automatically during this process.
After successfully incorporating a One Person Company (OPC), specific compliance formalities must be followed to ensure the company operates within the legal framework. These requirements are similar to those applicable to private limited companies. Our experts are available to assist you in meeting these compliance obligations, keeping your business fully compliant.