One Person Company (OPC) Registration
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One Person Company
According to the Companies Act, 2013, a One Person Company (OPC) is a separate entity in which an individual can set up a company. It allows people to own and run businesses in their own names, providing elements of business accountability and efficiency. The Companies Act, 2013 facilitates the establishment of One Person Companies (OPCs) in India. It regulates the registration and functioning of private companies in India. Unlike a public company, a private company must have at least two directors and two members, but unlike that, the company does not seek registration for the registrant. Legal information. Registering a trader in India requires one director and one member to represent the entire company. These companies are less regulated than private companies.
Advantages Of OPC Company in India
One Person Company (OPC) in India offers several advantages for entrepreneurs looking to start a business with limited liability and simplified compliance. Here are some key benefits:
Limited Liability: Owners are only liable for the company’s debts up to their investment in the company, protecting personal assets.
Single Ownership: An OPC allows for sole ownership, enabling entrepreneurs to have complete control over business decisions.
Simplified Compliance: OPCs face fewer regulatory requirements compared to private limited companies, making it easier to manage.
Perpetual Succession: The company continues to exist independently of the owner’s status, ensuring business continuity even in the event of the owner’s death.
Easier Funding: OPCs can raise funds through equity and have better access to loans and investments than sole proprietorships.
No Minimum Capital Requirement: Unlike other company types, there is no minimum capital requirement for registering an OPC, making it more accessible for entrepreneurs.
Conversion to Private Limited: An OPC can be converted into a private limited company once it reaches a certain threshold of paid-up capital or number of shareholders, allowing for growth and expansion.
Professional Image: Registering as an OPC can enhance credibility and trust with customers, suppliers, and investors compared to unregistered entities.
Flexibility in Operations: OPCs can be managed with a high degree of flexibility, allowing owners to adapt business strategies quickly.
Tax Benefits: OPCs may benefit from lower tax rates and exemptions available to companies under certain circumstances.
Compliances for a One Person Company
The Companies Act 2013 stipulates certain duties and must be complied with in a timely manner. These regulations ensure transparency and good governance, and protect the interests of all stakeholders, including China, business owners, managers, investors and tax authorities. These compliances can be divided into annual compliance, recurring compliance, post-construction one-time compliance and event-based compliance. The first category to be followed is done here.
Steps for Registration of OPC
Registering a One Person Company (OPC) in India involves several steps. Here’s a streamlined guide to help you through the process:
1. Obtain Digital Signature Certificate (DSC):
- Since the registration process is online, the first step is to acquire a DSC for the sole director of the OPC. This is essential for signing electronic documents.
2. Obtain Director Identification Number (DIN):
- Apply for a DIN for the sole director. This is mandatory for all directors in a company.
3. Choose a Unique Name:
- Select a unique name for the OPC. Ensure it complies with the naming guidelines set by the Ministry of Corporate Affairs (MCA) and is not similar to any existing company names.
4. Prepare Required Documents:
- Identity Proof: PAN card, Aadhaar card, or any government-issued ID of the sole member.
- Address Proof: Utility bill, rental agreement, or property deed for the registered office.
- NOC: A No Objection Certificate from the owner if the registered office is not owned by the member.
- Memorandum of Association (MoA) and Articles of Association (AoA): Draft these documents specifying the company’s objectives and rules.
5. Fill out the Registration Forms:
- Use the SPICe+ (Simplified Proforma for Incorporating Company Electronically) form available on the MCA website. Fill in the required details accurately.
6. File the Application:
- Submit the filled forms along with the required documents and payment of registration fees on the MCA portal.
7. Receive Certificate of Incorporation:
- Once the application is processed and approved by the Registrar of Companies (RoC), you will receive a Certificate of Incorporation, which officially registers your OPC.
8. Apply for PAN and TAN:
- After incorporation, apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for tax purposes.
9. Open a Bank Account:
- Open a bank account in the name of the OPC to handle all financial transactions.
10. Compliance and Filings:
- Adhere to ongoing compliance requirements, including annual returns and financial statements as mandated by law.
FAQ's on One Person Company (OPC) Registration
An OPC is a type of company that allows a single individual to operate a business with limited liability. It combines the benefits of a sole proprietorship and a private limited company.
Any Indian citizen who is at least 18 years old can register as an OPC member. The individual must be a resident of India.
Required documents include:
- Identity proof (PAN card, Aadhaar, etc.) of the sole member.
- Address proof (utility bill, rental agreement, etc.) of the registered office.
- Memorandum of Association (MoA) and Articles of Association (AoA).
No, there is no minimum paid-up capital requirement for OPC registration in India.
The registration process typically takes about 7-15 days, depending on the completeness of the application and the processing time by the Registrar of Companies
The name should be unique and not similar to any existing company names. It must comply with the guidelines set by the Ministry of Corporate Affairs (MCA).
No, an OPC can have only one director. However, it can have one or more shareholders.
The OPC must appoint a nominee at the time of registration. In the event of the member’s death, the nominee can take over the company.
Yes, an OPC can be converted into a private limited company once it reaches a certain threshold of paid-up capital or has more than one member.
OPCs are required to file annual returns and maintain proper accounting records. They also need to comply with the Companies Act, including holding an annual general meeting
No, the sole member must be an Indian citizen and resident. However, a foreign national can be a nominee.
OPCs may enjoy lower tax rates compared to other business structures and can benefit from certain exemptions available to companies under the Income Tax Act.
These FAQs cover essential aspects of OPC registration. If you have more specific questions or need further clarification, feel free to ask!