What is (OPC) One Person Company Registration?
The concept of One Person Company registration was introduced not so long ago by the Ministry of Corporate Affairs. This business model was introduced with an objective to give a strong business model option to single entrepreneurs. Earlier for incorporating a company at minimum two members and directors are required. To give young, single and enthusiastic entrepreneurs an option to venture into the corporate world concept of One Person Company was introduced.
One Person Company Registration in India
As per Companies Act 2013. Section 2(62) (OPC) One Person Company as a company which has only one person as a member. This is a special type of company which allows the sole owner to start a business under Private limited structure without adding any co-founder onboard. OPC is more popular for single managed business. OPC Registration is a modern approach to Sole-proprietorship business in India.
Nature of Business allowed under One person company
- OPC principally has the same almost all feature of the private company, thus all the provisions of a private company are applicable to OPC unless otherwise expressly excluded in the Act or rules made thereunder
- OPC can be converted into Public or Private Company and vice versa in certain cases.
- The word ‘One Person Company’ must be mentioned below the name of the company where ever applicable.
Who can register OPC?
A person who is resident in India i.e. he has stayed in India for 182 days during the immediately previous financial year. However, one such person can't form more than one OPC or become the nominee of more than one for such a company. Foreign nations cannot register one person company in India.
What is the feature of One person company?
- Personality determined passion and execution of a business plan.
- The desire of the entrepreneurial person to take additional risk and willingness to take additional responsibility.
- Personal assurance to the business which is an only idea of the person close to his heart.
- OPCs are a separate legal entity similar to that of any registered corporate in spite of its run by individuals.
- It must have only one member and have only one director.
- The member and nominee should be the natural person who is Indian Citizens plus resident in India.
- Minor shall not become member nor become the nominee of the One Person Company or hold a share with beneficial interest.
- One person Company can't be incorporated or changed into a company of section 8 of the Companies Act, 2013 etc
The process of registration of OPC (Open Person Company)
Step 1: Apply for Digital signature
Digital Signature also termed as DSC are required for signing all kinds of online documents and forms. Thus before initiating the procedure for OPC registration, the applicant is required to apply for Digital signature. There are certain bodies authorized to issue DSC by the MCA. For DSC a signed application form is required to be submitted along with PAN, address proof, a photograph of the applicant.
Step 2: Apply for Name Reservation
Once you have received your digital signature next step to apply for Name Reservation of your proposed company. Name Reservation application is filed through Reserve Unique Name (RUN) facility available on the Ministry of Corporate Affair’s official portal www.mca.gov.in. The applicant can file the name reservation application with two proposed names and one resubmission is allowed in case the proposed names are rejected. While finalizing the name of your organization following points must be kept in mind:
- The proposed name must not be similar to an already registered company, limited liability partnership or trademark. However, you can also apply for a similar name if the owner of such registered Company, LLP or Trademark issues you No Objection Certificate for using a similar name.
- The name must not violate the provisions of Emblems and Names (Prevention of Improper Use) Act, 1950.
- The name must not be insulting or disrespectful to any group of people.
- The name must end with OPC Limited.
Note: You can also apply for name reservation in SPICe form along with OPC registration application. However, it is recommended to go for name reservation before preparing the required documents for OPC registration.
Step 3: Prepare Incorporation Documents
Once the name is approved through RUN service it will be reserved for 20 days. The applicant is required to fill all the relevant information in SPICe Form and prepare all the necessary documents that are required to be attached with OPC registration application. Following documents are required to be prepared:
- Memorandum Of Association prepared in Form INC 34 also known as SPICe MOA
- Article Of Association prepared in Form INC 35 also known as SPICe AOA
- INC-9 signed by the shareholder and duly notarized
- DIR-2 duly signed by the Director
- NOC signed by the nominee.
- ID and Address proof of subscriber as well as the nominee
- Address proof of the registered office address
- NOC from the owner of the registered office address
- if the property is rented then a copy of the rent agreement
Step 4: File Incorporation Application
Once all the required documents are prepared an application for OPC Registration is to submit. For this E forms SPICe, SPICe AOA and SPICe MOA are uploaded on the MCA portal as linked forms and fees should be submitted. After successful submission, a Service Request number (SRN) is generated. The applicant can track the status of the OPC registration application through this SRN number.
Step 5: Grant of Registration
After thorough verification of the OPC registration application if the proper officer has any issues then the application is sent back for resubmission. For which the applicant is required to make the necessary changes and resubmit. After satisfaction, OPC registration is granted and Certificate of incorporation (COI) is issued by the authorities. The following information is conveyed after successful registration:
- Company Identification Number (CIN) for the company
- Director Identification Number (DIN) for Director
- Permanent Account Number (PAN) for company
- Tax Deduction and Collection Account Number (TAN) for company
- Complete drafting and filing of incorporation forms for OPC registration.
- MOA and AOA filling
- Drafting of Board resolutions, authorization letter, and other documents.
- End to end solutions for OPC registration.
- Name approval from MCA
- DIN, DSC certificates from the government authority.
- Legal agreements, drafts, samples, advisory related to OPC.
Documents Required for One Person Company Registration
Documents required from Director
- Scanned copy of PAN.
- Copy of passport/voter ID etc.
- Latest telephone Bill/ bank statement etc.
- Passport size photograph etc.
For the Registered office
- Copy of Rent agreement to be notarized.
- NOC obtained from owner of property where applicable.
- Copy of Property deed/ copy of sale deed (if owned property).
- Others if required.
Restriction on Registration of OPC
- Conversion or incorporation of OPC into section 8 company is not possible.
- It cannot carry out non-banking activity, including investment in securities of anybody corporate
How many types of OPC can be incorporated under the Act?
- A company limited by shares or;
- A company limited by guarantee or;
- An unlimited company
Benefits available to OPC (One Person Company)
- OPC provides new business ideas to the new start-up business
- The most important advantage is the limited liability which attracts many people to start up OPC
- OPC need not bother too much about compliance unlike Companies
- OPC requires minimal capital, to begin with. It can also raise capital from others like venture capital, other financial institution etc.
- Compulsory rotation of auditor so appointed after the maximum term is not applicable
Note: Exemption of section 96, section 98, and from 100 to 111 are allowed to OPC under Companies Act 2013.
Appointment of Directors in OPC (One Person Company)
- AOA can provide the appointment of first directors in such a company.
- It may also have a single director.
- Maximum number of Directors should be 15, then it can increase from number 15 by passing the special resolution.
- Director must have stayed in India for not less than 182 days in the previous calendar year.
What all exemptions under companies act 2013 is there for OPC?
- OPC is not mandatorily required to file annual returns.
- OPC is exempted from holding Annual General Meetings and Board Meetings.
- Signing on Financial Statements is not necessary.
- Tribunal enjoys the power to call meetings of members.
- Notice of the meeting is not mandatory.
- Statement to be annexed to notice is not required by law.
- The quorum for meetings is relaxed.
- Restriction on voting rights is not imposed as in other forms of the company.
- Adherence to rules and regulation pertaining to the Companies Act 2013 regarding voting by show of hands, voting through electronic means, Demand for the poll, Postal ballot, Circulation of members’ resolution is exempted.
Frequently Asked Questions on OPC
An OPC is mandated under the companies' act 2013 to compulsorily convert into the private company on occasions when it's paid-up capital increases above 50 lacs or turnover is above 20 Corer. The conversion must be done within 6 months.
No, a foreigner cannot be appointed as a nominee in an OPC. The name of the person nominated shall be mentioned in the. Form No INC-2 along with consent of such nominee obtained in Form No INC-3 is to be filled.
Yes, the affidavit in Form INC-9 is required to be filed by the subscriber of the memorandum.
No, a public limited company cannot be converted into an OPC.
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