The One Person Company Registration (OPC) was introduced in India under the Companies Act, 2013. It allows individuals to start their businesses with limited liability and full control, offering the benefits of a private limited company but with fewer compliance requirements.
This guide will explain:
- What is an OPC?
- Key features of OPC
- Benefits of registering an OPC
- Eligibility criteria
- Step-by-step registration process
- Documents required
- Post-registration compliance
1. What is a One Person Company?
A One Person Company (OPC) is a type of private limited company that can be formed by one person. This structure lets a single entrepreneur enjoy corporate benefits like limited liability without needing a partner.
2. Key Features of an OPC
- Single Owner: Only one person can be the shareholder and director.
- Limited Liability: Personal assets are protected, and liability is limited to the company’s capital.
- Separate Legal Entity: OPC is a separate entity from its owner.
- Perpetual Succession: The company continues even after the owner’s demise, with a nominee stepping in.
- No Minimum Paid-up Capital: No mandatory capital is required.
3. Benefits of Registering an OPC
- Limited Liability Protection: Your personal assets are protected in case of business losses or debts.
- Fewer Compliance Requirements: OPCs face fewer formalities than other company types.
- Legal Recognition: OPC provides legal credibility to your business.
- Easy Conversion: It can be converted into a private or public limited company as your business grows.
4. Eligibility Criteria for OPC Registration
- Indian Citizenship: Only Indian citizens residing in India can register an OPC.
- Age Requirement: The director must be at least 18 years old.
- Single Shareholder: Only one shareholder, who can also be the sole director.
- Nominee Requirement: A nominee must be appointed in case of the shareholder’s death or incapacity.
- No Dual OPC Membership: The person forming an OPC cannot be part of another OPC.
5. Step-by-Step Process for OPC Registration
Step 1: Get a Digital Signature Certificate (DSC)
The director needs a DSC to file documents online with the Ministry of Corporate Affairs (MCA).
Step 2: Apply for Director Identification Number (DIN)
The director must apply for a DIN through the SPICe+ form (INC-32).
Step 3: Reserve the Name
The proposed name must be reserved using the SPICe+ form on the MCA portal and should end with “Private Limited.”
Step 4: Submit the SPICe+ Form
Once the name is approved, fill out and submit the SPICe+ form with details of the company, director, and nominee.
Step 5: Draft the MOA and AOA
The Memorandum of Association (MOA) and Articles of Association (AOA) must be prepared, outlining the business objectives and rules.
Step 6: File for Incorporation
Submit all incorporation documents, including proof of office, identity proofs, and nominee consent. The Registrar of Companies (ROC) will issue the Certificate of Incorporation.
6. Documents Required for OPC Registration
- Proof of Identity: PAN card and Aadhar card for the director and nominee.
- Address Proof: Passport, driver’s license, or voter ID.
- Office Address Proof: Rent agreement, NOC, or utility bill.
- Nominee’s Consent Form: Form INC-3 with the nominee’s consent.
- Director’s DSC and DIN.
7. Post-registration Compliance for OPC
After registering the OPC, the following compliance steps are required:
- Income Tax Filing: Annual tax returns must be filed as per the Income Tax Act.
- Annual Filing: Annual returns must be submitted to the ROC.
- Board Meetings: Hold at least one board meeting every six months.
- Audit Requirements: An auditor must be appointed within 30 days of incorporation.
Conclusion
Registering a One Person Company (OPC) is a great option for solo entrepreneurs looking for limited liability and legal credibility while maintaining full control over their business. The registration process is simple, and the compliance requirements are lighter, making OPC an efficient way to start and manage a business in India.
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