With the advance of the Company’s Act in 2013, a new concept known as the “One Person Company” was established in India. A single person in India can form a One Person Company. Prior to the OPC Companies Act’s 2013 introduction, only two people could create a business. An OPC combines the advantages of a sole proprietorship with those of a company. In the past, a person should only choose a single proprietorship if they needed to start a company.
Overview of One Person Company Registration
The 2013 Companies Act promoted the establishment of one-person businesses in India. It controls the establishment and operation of one-person businesses in India. A one-person corporation does not require any group of individuals to be incorporated, in contrast to a public company, which requires at least two directors and two members. A firm could only be incorporated by a group of persons until recently. In India, a business with a single owner is referred to as a one-person firm. Before the Companies Act of 2013, a business could only be founded by two people.
According to Section 262 of the Companies Act 2013, it is acceptable to formally register a one person corporation in India. A single director and a single member representing the entire form are required to register a one-person corporation in India. Compared to a private business, this sort of corporation has a very low compliance burden.
Who is eligible to serve as an OPC member?
To represent as a member and nominee of an OPC, a natural person must be an Indian citizen and resident of India.
For the aforementioned purposes, a person who has lived in India for at least 102 days during the immediately preceding fiscal year is referred to as a “resident in India.”
OPC Registration in India Minimum Requirements
- Two shareholders are required.
- A resident of India must be one of the Directors.
- Two promoters and one witness are included on the DSC (Digital Signature Certificate).
- a minimum of two directors
- Minimum Share Capital Authorized is Rs.100,000. (INR One Lac).
- The same person is assumed as both director and a shareholder.
- For all Directors, a DIN (Director Identification Number) is required.
Benefits of OPC Registration in India
The member gives the OPC the status of a separate legal body. The OPC has a special legal standing that protects the only person who incorporated it. The member’s liability is restricted to the value of the shares that he or she owns; the member is not personally liable for the company’s loss. As a result, creditors may file a claim against the OPC rather than the member or director.
Simple access to financing
Due to the fact that it is a private company, a one-person company in India can readily receive money through venture capital, angel investors, incubators, and other sources. Nowadays, getting money is easy.
The Companies Act of 2013 grants the OPC some exemptions from some compliance standards. The cash flow statement need not be created by the OPC. The company’s secretary doesn’t need to provide any annual reports or keep any books of accounts.
Additionally, a one-person company in India can be incorporated without any problems. The clearance for integration should come from a member who also serves as a director. No minimum paid-up capital requirement exists.
Simple to operate
Allowing one person to locate and lead the OPC will simplify the management of the organization. The process of making decisions is simple and quick. By entering both ordinary and special resolutions in the minute’s book and having just one other member sign them, the member can quickly pass both of them. Managing the business won’t be difficult because there won’t be any internal conflicts or delays.
Even with just one member, the OPC can perform the eternal succession operation. When incorporating the OPC, the single-member must select a nominee. In the case that a member passes away, the candidate will take over running the business.
OPC Registration Process: how to register opc online?
Step 1 :Apply for DSC
The first step is to obtain the suggested Director’s Digital Signature Certificate (DSC), which calls for the following paperwork Address confirmation, PAN card, Aadhaar card Email address, and phone number.
Step 2: Request a DIN
Once the Digital Signature Certificate (DSC) has been created, the Director Identification Number (DIN) of the desired Director must be requested in the SPICe Form along with proof of the director’s name and address. Only companies with an established customer base can use the option (Form DIR-3). It says the applicant is exempt from filing Form DIR-3 individually starting in January 2018. Using the SPICe form, a maximum of three directors may now request a DIN.
Step 3: Apply for name approval
The following step in incorporating an OPC is selecting a company name. The business will be called “XYZ (OPC) Private Limited. The name can be sanctioned in the Form SPICe+ 32 application. There can be only one preferred name and one justification for keeping it on the Form SPICe+ 32 application. Submit a fresh name by submitting a second Form SPICe+ 32 applications if the first one is rejected. As soon as the MCA authorizes the name, we go on to the next phase.
Step 4: Required Documents
The following paperwork must be prepared and filed to the Registrar of office: MOA, AOA, Form INC-3, Form INC-9, DIR-2, and evidence of office address, among others.
Step 5: Submitting OPC Forms to the MCA portal
Along with the DSC of the Director and the professional, all of these papers will be posted to the MCA site for approval and connected to the SPICe Form, SPICe-MOA, and SPICe-AOA. When the Company is incorporated, an automatic process generates the Pan Number and TAN. The PAN Number and TAN do not require separate applications to be submitted.
Step 6: Certificate of Incorporation issuance process
We can start our firm after the Registrar of Companies (ROC) issues a Certificate of Incorporation following verification.
Documents needed for One Person Company Registration
- OPC registration is a simple process; however it requires the documentation listed below.
- The director and nominee must present identification, such as an Aadhar card, voter ID, PAN card, driver’s license, etc.
- Creating the company’s Articles of Association (AOA) and Memorandum of Association (MOA). These two must be submitted throughout the registration process because they are both crucial. Don’t forget to list all of your company’s goals and objectives.
- It is necessary to obtain the selected nominee’s consent, which is submitted using form INC-3.
- The PAN card and Aadhar card of the OPC nominee must be provided for the registration process.
- The One Person Company’s authorized director and nominee must submit the affidavit in form INC-9 and DIR-2.
- During the registration process, residential documentation of the location of the registered office, where business-related activities and communications are carried out, must be supplied. It can be any utility bill, such as one for power, gas, or telephone service, but it shouldn’t be more than two months old.
- No-Objection Declaration.
- In the event that you are operating your business from rented space, a rent agreement is necessary.
- A passport-size photo of the designated director and nominee as well as a copy of their PAN card should be included with the application.
- The director’s DSC and DIN are necessary for OPC registration.
The OPC Registration in India Process Timeline
The proposed directors’ DSCs and DINs can be acquired in a single day. An OPC can acquire its Certificate of Incorporation in 3–5 days. Subject to departmental permission and a response from the relevant agency, the entire incorporation process for an OPC lasts about 10 days. The duration of time needed for incorporation will be determined by the client’s submission of pertinent documents and the speed of government approvals. Please pick a distinctive name for your company and make sure you have all the necessary paperwork before beginning the incorporation procedure to ensure quick incorporation.
Tax regulations for OPC Registration in India
- Filing income tax returns is required.
- TDS must be completed every quarter and include the TAN. If the business employs people, source deduction of tax is required.
- If the OPC employs more than ten people, the law mandates that they obtain an ESI registration.
- OPC with a valid certification must enroll in VAT and service tax returns.
- OPC is subject to a 30% tax rate on its entire fiscal year’s income under the tax rate slab. This is a bit higher than the tax slab rate for individuals, which ranges from 10% – 30% of their income depending on their income.
One-Person Company Vs. Sole Proprietorship: The difference
One Person Company
- Separate Entities: The proprietor and the company are regarded as two distinct entities.
- Limited Liability: The owner’s liability is capped at the amount of money they invested in the business.
- Taxation of companies: An OPC is taxed under the Income Tax Act for private corporations because it is registered as a private limited company.
- Succession: In the case that a management member passes away, a chosen nominee may be appointed to lead the business. The candidate must be an Indian national and a resident of that nation.
- Annual compliances: OPC must also provide annual reports, have its records audited, and notify the RoC of any modifications to the structure.
- Single Entity: The owner is regarded as a single entity, as is the company.
- Unlimited Liability: Because the owner and the companies are the same, if the latter suffers losses, the owner is responsible for all of them.
- Individual Taxation: The Company’s income is considered to be the owner’s income and is therefore subject to individual taxation.
- Succession: Because the owner and the business are regarded as a single entity in a sole proprietorship, the company terminates upon the death of the owner. Therefore, succession can only occur when the owner leaves their property to a new owner in their last will.
- Annual compliance: A sole proprietorship is just required to submit its ITR and keep track of its financial records.
The OCP registration cost in India
In India, the nominal share capital of the firm determines the government fees for creating a One Person Company (OPC). The government fees, for instance, would be 2,000/- rupees for an OPC registration with a share capital of 100,000. As compared to this, if the nominal share capital is between Rs. 10,00,000 and Rs. 50,00,000, plus Rs. 2,000. For each Rs. 10,000, or fraction thereof, of nominal share capital, Rs. 200 shall be added. However, there would be other expenses for OPC Incorporation in India, such as DIN application fees, stamp taxes, and form filing fees.
For your OPC company registration, Caonweb (CA Near me services provider) submit a name approval application. Also, Caonweb professionals will draught the MOA and AOA on your behalf and submit the required documentation to the MCA to become incorporated. PAN and TAN allocation take place simultaneously. Your OPC Registration status will be updated by our team of specialists. In essence, we have you covered entirely.
How may an OPC be converted into a private limited company?
The minimal number of members and directors for an OPC can be raised to two before a special resolution is passed to convert it voluntarily into a private limited company. The conversion of OPC to a private limited company requires obtaining a No Objection Certificate (NOC) in writing from the creditors.
Are one-person companies a good fit for small businesses?
Yes, Without a doubt, the One Person Company is appropriate for small firms with annual revenues under Rs. 2 crore.
What are limitations for One-Person Companies ?
No person under the age of 18 may join the One Person Company or serve as a nominee.A beneficial interest in a share cannot be held by a minor.Before the passage of two years from the date of OPC’s incorporation, OPC is not permitted to undergo a voluntary conversion.Under the provisions of Section 8 of the Act, it cannot be formed or changed into a company.Non-banking financial investment activities are not something it can do.
How can I replace a nominee for my business?
A Nominee may be changed by properly notifying the Registrar of Companies and submitting the required paperwork.
Chartered Accountant by profession, CA Sanket Agarwal has an experience of above11 years in Cross Border compliance , Import Export , International Taxation & is a passionate content creator.