One Person Company Registration Online in India
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What is One Person Company Registration in India?
Before the enactment of the Companies Act of 2013, the formation of a company in India necessitated at least two individuals. However, with the advent of this legislation, there’s a notable shift towards promoting One Person Companies (OPCs). The Companies Act of 2013 specifically facilitates the creation and operation of OPCs in India, allowing a single individual to spearhead such entities. While traditional private companies mandate a minimum of two directors and two members, a One Person Company is a departure from this norm, as it can be formed by a single person. The legal framework supporting OPCs in India is outlined in Section 262 of the Companies Act of 2013. The OPC Registration process requires the representation of the entire company by a lone director and a single member. Noteworthy is the streamlined compliance structure associated with OPCs, which imposes fewer responsibilities compared to traditional private companies. This legal provision offers a simplified avenue for individuals looking to establish and operate companies independently in India.
- Features of One Person Company in India
- Checklist for One Person Company Registration in India
- Documents Required for OPC Registration in India
- Procedure for One Person Company Registration
- Restrictions on One Person Company
- Compliances for One Person Company in India
- Why RegisterKaro?
- Frequently Asked Questions
One Person Company - Incorporation Certificate [Sample]
Features of One Person Company in India
Following are some important features of One Person Company in India:
1. Simple Succession:
Despite the fact that the company’s everyday operations are managed by a single person, OPC offers opportunities for eternal succession. Following the death of a company member, the nominee can administer the business.
2. Limitation of Liability:
A one-person company member has limited liability. Because OPC is a registered corporation, it is treated as a separate legal entity, providing its members with greater protection. Members’ liability is restricted to their shares, therefore they are not accountable for any losses incurred by the firm. In the event of bankruptcy, creditors may sue the corporation rather than the director for procuring the company’s debt.
3. Shareholder and sole directorship:
In a One Person Company, a single member serves as a director and is responsible for managing the company’s day-to-day operations. There is no need for an executive director to oversee daily operations in this situation. A single member is more than adequate and serves as a shareholder with full responsibility.
4. Ownership of Real Estate:
Because the OPC is considered a separate legal organisation, the individual has the ability to possess company property and other assets in their name. Other people cannot claim the properties, which include machinery factories, residential property, structures, and other assets. The OPC has the legal authority to acquire land directly in its name.
Checklist for One Person Company Registration in India
Following is the checklist for OPC Registration in India:
Membership standards must be met at both the maximum and minimum levels
Before incorporation, a nominee should be picked
Form INC-3 should be used to request the nominee’s approval
Companies (Incorporation Rules) 2014 require that the OPC name be selected
The minimum authorized capital of Rs. 1 Lakh
Digital Signature Certificate for Potential Director
Proof of the One Person Company’s registered office
Documents Required for OPC Registration in India
Following are the crucial documents required for One Person Company Registration in India
A scanned copy of a current bank statement:
Bank statements can be accessed via Internet banking or by visiting a bank branch. Account statements and transaction summary statements are two additional common titles for them.
A phone bill, an electricity or gas bill and a mobile bill:
- Utilities often include power, gas, water/sewage, and garbage disposal. Other services, such as internet, cable TV, and phone service, are occasionally viewed as extra utilities because they are now considered standard in the majority of Indian households. The cost of utilities might vary greatly based on your location, the temperature where you reside, and your usage habits. As a result, these are also presented as critical documents for OPC Registration.
Rental agreement in English, digitally transcribed:
- Tenants are frequently given hard copies of rental agreements. This must be scanned and submitted to the appropriate authority for documentation.
A digital transcription of a landlord’s no-objection certificate:
- This document comes from the specific landlord. Section 12 of The Companies Act, 2013 requires that every corporation maintain a registered address. When a company is incorporated in India, the registered address is attached to the SPICe+ form. If the business’s address changes after formation, a Form INC-22 notification of the company’s new registration address must be sent to the ROC.
A scanned copy of the property or sale deeds in English (if the property is owned):
- A sale deed is a legal document used in real estate transactions to confirm the purchase of property and the transfer of ownership from the seller to the buyer. This is the primary ownership transfer documentation. A sale deed is also known as a conveyance deed or a final deed.
Procedure for One Person Company Registration
Following is the procedure for One Person Company Registration in India:
Step 1:
Despite the fact that the company’s everyday operations are managed by a single person, OPC offers opportunities for eternal succession. Following the death of a company member, the nominee can administer the business.
Step 2:
A one-person company member has limited liability. Because OPC is a registered corporation, it is treated as a separate legal entity, providing its members with greater protection. Members’ liability is restricted to their shares, therefore they are not accountable for any losses incurred by the firm. In the event of bankruptcy, creditors may sue the corporation rather than the director for procuring the company’s debt.
Step 3:
In a One Person Company, a single member serves as a director and is responsible for managing the company’s day-to-day operations. There is no need for an executive director to oversee daily operations in this situation. A single member is more than adequate and serves as a shareholder with full responsibility.
Step 4:
Because the OPC is considered a separate legal organisation, the individual has the ability to possess company property and other assets in their name. Other people cannot claim the properties, which include machinery factories, residential property, structures, and other assets. The OPC has the legal authority to acquire land directly in its name.
Step 5:
The ROC issues a certificate of incorporation with a PAN and TAN.
Step 6:
Open a bank account and get your business started.
The entire procedure of OPC Registration can be finished in only 20 days. All you have to do is contact RegisterKaro and complete the process as soon as possible.
Restrictions on One Person Company
Despite its many advantages, starting a one-person business comes with a number of constraints.
1. Not Suitable for Scalability:
Registering your company as an OPC is an excellent choice for a small business structure. However, if you intend to expand it up to higher levels, this may not work. The total number of persons in an OPC at any given time is always one. You cannot register your company as a One Person Company if you intend to add more members and shareholders. As a result, OPC is unlikely to obtain additional cash. This will stifle corporate expansion and growth.
2. Increased Restriction on Commercial Activities:
One Person Company is not permitted to engage in non-banking financial investment operations under the rules and regulations. Registering as an OPC does not provide you the freedom to invest in the security of other corporations.
3. There is no distinct distinction between ownership and management:
Because a single person serves as both the company’s director and its management, there is no apparent boundary between the two jobs. All decisions must be made and approved by a single individual. As a result, there is a greater likelihood of unethical behavior.
LLP Compliance
Certain requirements are outlined in the Companies Act of 2013 and must be satisfied by the deadlines specified. These rules promote transparency and good governance while protecting the interests of all parties concerned, including the ROC, shareholders, directors, investors, and tax authorities. These compliances are classified as annual compliances, recurring compliances, one-time post-incorporation compliances, and event-based compliances. The first category of one-time compliances has already been thoroughly discussed.
Compliance
A one-person company must immediately comply with particular legal requirements established in the Companies Act of 2013 and, if necessary, secure local registrations in accordance with the state legislation of the state in which the One Person Company is conducting business. The full list of compliances, together with their timeframes, is shown below. Contact one of our startup advisors for more in-depth conversations.
| Forms | Penalty |
|---|---|
| Appointment of 1st Auditor | Within 30 Days of Incorporation |
| Issue of Share Certificate | Within 60 Days of Incorporation |
| Stamp Duty Payment on Share Certificate | Within 30 Days of the Certificate Issue |
| Filing of INC-20A (Declaration for Business Commencement) Registered Address maintenanceRegistered office details filingCurrent Bank Account openingEntire Subscribed Capital received | Within 180 Days of Incorporation, but before commencing business |
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FAQs
What is an OPC?
OPC stands for One Person Company, which is a type of business entity that can be formed with just one shareholder.
Who can form an OPC?
Only an Indian resident who is a natural person can form an OPC. Non-residents or corporate entities cannot form an OPC.
What is the minimum capital requirement for OPC registration?
There is no minimum capital requirement for OPC registration. You can start with any amount of capital.
Can an OPC have more than one director?
No, an OPC can have only one director who is also the sole shareholder of the company.
Is it mandatory to have a nominee for an OPC?
Yes, every OPC must nominate a person who will become the owner of the company in case of the director’s death or incapacity.
Can an OPC be converted into a private limited company?
Yes, an OPC can be converted into a private limited company after two years of its incorporation, subject to certain conditions.
Are there any tax benefits for OPCs?
OPCs are eligible for the same tax benefits as other types of companies, such as deductions on business expenses and tax rates applicable to companies.
Can an OPC be involved in multiple business activities?
Yes, an OPC can engage in any lawful business activities, unless specifically restricted by the laws or regulations.
How long does it take to register an OPC?
The registration process for an OPC typically takes around 10 to 15 working days, subject to the availability of all necessary documents and information.
Can an OPC have branches in multiple locations?
Yes, an OPC can have multiple branches across India or even internationally, subject to compliance with relevant laws and regulations.
Is it necessary to have a physical office for an OPC?
Yes, an OPC must have a registered office address in India. It can be a residential or commercial address.
What are the annual compliance requirements for an OPC?
OPCs have to file annual financial statements and income tax returns with the Registrar of Companies (ROC) each year.
Can an OPC be converted into a partnership or sole proprietorship?
No, an OPC cannot be converted into a partnership or sole proprietorship. It can only be converted into a private limited company.
Is it mandatory to appoint an auditor for an OPC?
An OPC is required to appoint an auditor within 30 days of its incorporation. The auditor must be a qualified chartered accountant.
Can an OPC be used for raising funds from investors?
Yes, an OPC can raise funds through various means such as equity funding, venture capital, or borrowing, subject to compliance with relevant laws.
Can an OPC have a foreign director?
No, an OPC can have only an Indian resident as a director. Non-residents cannot be directors in an OPC.