One Person Company Registration in India – Process, Fees, Documents, Benefits
The Companies Act, 2013 introduced the concept of One Person Company in India in order to support entrepreneurs capable of raising their own venture. This venture allows them to create a single person economic entity. In case of a One Person Company registration, only one member should be there while registering this form of a company while in the case of a Limited Liability Partnership firm or a Private Limited Company, there must at least be 2 individuals in order for registering the company. The One Person Company is a company that has only one person as a member, as stated under the section 2(62) of the Companies Act, 2013.
As per Companies (Incorporation) Rules, 2014, the sole director and shareholder must propose an individual as his/her nominee in the Memorandum of Association and Articles of Association while incorporating a One Person Company. During an untoward circumstance like the demise or incapacitation of the sole promoter, the sole promoter’s position is transferred to the nominee who would have to commence the responsibilities of the sole promoter. A One Person Company must file audited financial statements with the Ministry of Corporate Affairs at the end of every financial year. In case a One Person Company’s turnover exceeds Rs. 2 crores, OPC e converted into Private Limited Company.
Characteristics of One Person Company
- One person company consists only one member who is shareholder/Directory.
- Easy to start the business and funs are easily available
- Entire business would be managed by one person only and make it quite easy to handle all business related issues
- Encourage the small size of businesses
- Tax benefits
- Freedom of operation
- Limited Liability
- Cash flow statement is not required for one person company
- Minimum regulations and compliance burden is not there with OPC
- Borrowing Capacity
- Separate Legal Entity
OPC Registration Process in India
The Steps to be followed for Registering a One Person Company
Step 1: Apply for DSC
The first step is to obtain the Digital Signature Certificate (DSC) of the proposed Director which required the following documents:
- Address proof
- Aadhaar card
- PAN card
- Email Id
- Phone number
Step 2: Apply for DIN
Once the Digital Signature Certificate (DSC) is made, the next step is to apply for the Director Identification Number (DIN) of the proposed Director in SPICe Form along with the name and the address proof of the director. Form DIR-3 is the option only available for existing companies. It means with effect from January 2018, the applicant need not file Form DIR-3 separately. Now DIN can be applied within the SPICe form for up to three directors.
Step 3: Name Approval Application
The next step while incorporating an OPC is to decide on the name of the Company. The name of the Company will be in the form of “ABC (OPC) Private Limited”.
The name can be approved in the Form SPICe+ 32 application. Only one preferred name along with the significance of keeping that name can be given in the Form SPICe+ 32 application. If the name gets rejected, another name can be submitted by applying another Form SPICe+ 32 application.
Once the name is approved by the MCA we move on to the next step.
Step 4: Documents Required
We have to prepare the following documents which are required to be submitted to the ROC:
- The Memorandum of Association (MoA) which are the objects to be followed by the Company or stating the business for which the company is going to be incorporated.
- The Articles of the Association (AoA) lays down the by-laws on which the company will operate.
- Since there are only 1 Director and a member, a nominee on behalf of such a person has to be appointed because in case he becomes incapacitated or dies and cannot perform his duties the nominee will perform on behalf of the director and take his place. His consent in Form INC – 3 will be taken along with his PAN card and Aadhar Card.
- Proof of the Registered office of the proposed Company along with the proof of ownership and a NOC from the owner.
- Declaration and Consent of the proposed Director of Form INC -9 and DIR – 2 respectively.
- A declaration by the professional certifying that all compliances have been made.
Step 5: Filing of Forms With MCA
All these documents will be attached to the SPICe Form, SPICe-MOA and SPICe-AOA along with the DSC of the Director and the professional, and will be uploaded to the MCA site for approval. The Pan Number and TAN is generated automatically at the time of incorporation of the Company. There is no need to file separate applications for obtaining PAN Number and TAN.
Step 6: Issue of the Certificate of Incorporation
On verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and we can commence our business.
One Person Company (OPC) Registration Fees
Government fees for registering a One Person Company (OPC) in India depends on the nominal Share Capital of the company. For e.g. The Government fees for the OPC registration whose Share Capital is 10,00,000 the Government fees would be 2,000/- rupees. Whereas if nominal share capital ranges between Rs. 10,00,000 to Rs. 50,00,000 – Rs 2,000. Rs. 200 will be added for every Rs. 10,000 or part thereof of nominal share capital.
However, there would be additional costs such as DIN application fees, stamp duties, form filing fees as well for OPC Incorporation in India. Do not miss filing Form 20A once you have registered your OPC
Documents for Obtaining OPC Certificate
For opc registration anywhere in India, for which our well-resourced and internationally admired law firm based on Delhi has been offering efficient and excellent legal services for last many years, the following are statutory requirements:
- One Director and one Subscriber; both can also be the same person
- One Nominee
- A Minimum Paid Up Capital of INR-100,000/- (One Lac)
- Copies of the PAN Cards of the Proposed Director/Subscriber and Nominee
- DIN and DSC of the Director
- Address Proofs of the Residences of the Proposed Director and Nominee
- Proof of the Location of the Proposed Registered/Head Office of the OPC
The director/subscriber and the nominee should preferably be Indian citizens. Again, the proposed nominee must be an adult person and must not hold any beneficial share in the associated one person company.
Benefits of One Person Company Registration
- Independent Existence: The one of the major advantages that come with this is that in the eye of law, a company is a person, having a common seal, and perpetual succession. It gets the authority to exercise all the functions of an incorporated person.
- Limited Liability: The person is restricted to raise unlimited liability as the law implies that the liability of the member will be up to the extent of his share in the company. Hence, consider it as a good perspective.
- Separate Property: An OPC has its own separate entity due to having separate legal entities and functions. So, OPC will become the owner of its assets, and the member will not have any right in the assets of the company.
- Tax Flexibility And Savings: Directors’ remuneration, rent and interest are a deductible expense which reduce the profitability of the Company and ultimately brings down taxable income of your business.
- Complete Control Of The Company: Due to the limit of having one person as a member and owner of the OPC company, hence, that person has complete control of the company inside as well as outside.
If you are looking to register a One Person Company (OPC) in India, there are several steps that you need to follow. These include obtaining a Digital Signature Certificate (DSC), obtaining a Director Identification Number (DIN), selecting a unique company name, and filing the necessary documents with the Registrar of Companies (ROC). It is advisable to seek the assistance of a professional service provider like Kanakkupillai to ensure a smooth and hassle-free registration process.
Kanakkupillai is a well-known brand in India that provides a wide range of business registration and compliance services, including One Person Company (OPC) registration. With their expertise and experience in the field, they can help you navigate the complexities of the registration process and ensure that your OPC is registered quickly and efficiently. So, if you are looking to register an OPC, look no further than Kanakkupillai for expert assistance.
FAQ on One Person Company Registration in India
Restrictions in OPC is they cannot carry out Non-Banking Financial Investment activities, including the investments in securities of anybody corporates. It cannot be converted to a company with charitable objects mentioned under Section 8 of the Companies Act, 2013
The Conditions in formation of OPC is only natural persons who are Indian citizens and residents are eligible to form a one-person company in India. The same condition applies to nominees of OPCs. Further, such a natural person cannot be a member or nominee of more than one OPC at any point in time.
Registration is compulsory for one person company according to Section 2 (62) of the Company's Act 2013, a company can be formed with just 1 director and 1 member. One Person Company registration in India is a type of entity where there are lesser compliances requirements than that of a Private Limited Company.
Employees of one-person company (OPC) is a type of company where there is only a single member. This type of company is relatively new in India, introduced by the Companies Act of 2013. OPCs are popular because they offer many benefits of traditional companies, but with simpler regulations and compliance requirements.
OPC do not allow who are not Indian citizen. He or she cannot be a nominee or shareholder of more than one OPC. And lastly, they should not be minors.
Minimum capital for OPC can be started with a minimum authorised capital of Rs. 1 lakh. There is no mandatory requirement for a minimum paid up capital.
OPC can have 2 directors as per the companies act, 2013, One Person Company (OPC) amendment has been introduced which states that a private company must require 2 directors and members while there must be 3 directors and 7 members in the public company.
OPC have limited liability amongst the several advantages an OPC has to offer, one striking benefit it renders is the limited liability to the shareholder. An OPC is a separate legal entity and therefore, the liabilities of the company are not shoved on the face of the shareholder.
OPC pay salary to Director, any remuneration paid to the director will be allowed as a deduction under income tax law, unlike proprietorship.
OPC own property, sale, purchase and own the property like individual. Contractual Rights: OPC, being a legal entity different from its members, can enter into contracts for the conduct of the business in its own name.