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What is a One Person Company?
Registering a company is the first step to start a business in India. The One Person Company (OPC) is a new form of company formation, introduced in the Companies Act of 2013.
In OPC, a single promoter gains full authority over the company, he will be the sole shareholder and director (however, a director nominee is present, but has zero power until the real director proves incapable of executing the contract). An OPC is a hybrid structure, it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. OPC will give the solo entrepreneur all benefits of a private limited company which means he will have access to credit, bank loans, limited liability, legal protection for business, access to market etc.
However, one needs to note that under an OPC, there can be no opportunity for contributing to employee stock options or equity funding. Additionally, if an OPC company has a consecutive 3-year average turnover of Rs. 2 crores or more or has acquired a paid-up fund of Rs. 50 lakh and over, then it must be converted to a private limited company or public limited company within six months.
Benefits of Registering a One Person Company
Registering a Private Limited Company offers many benefits.
- Separate Legal Existence
- Limited Liability of Shareholders
- Continuous Existence
- No requirement to hold Board Meeting, Annual General or Extraordinary General Meeting
- Less Compliance compared to the requirements of a Pvt. Limited Company
- Easy Fund Raising
- Improves Trust and increases credibility among vendors and lending institutions
Requirements for Registering a One Person Company
Registering a One Person Company will require the following.
- Minimum 1 Shareholder*
- Minimum 1 Director*
- Minimum 1 Nominee
- No minimum capital is required. However, A OPC Company should have minimum authorized share capital of at least Rs. 1 lakh
- The name of the Company should be unique and should not be similar to the any existing company name or trademark.
* Director and Shareholder can be the same person.
Detailed Registration Process
The Ministry of Corporate Affairs governs the company registration process. The below registration process is basis the governing laws of MCA:
- Step 1: Application for DSC (Digital Signature Certificate)
- Step 2: Apply for DIN (Director Identification Number)
- Step 3: Application filing for Nameavailability
- Step 4: Drafting and Filing of eMoa and eAoA
- Step 5: Apply for PAN and TAN of the company
- Step 6: Certificate of Incorporation issued by RoCalong with PAN and TAN
- Step 7: Open a Current Bank account on the company name
Documents required for One Person Company Registration
In India, One PersonCompany registration cannot be done without proper identity and address proof. Prescribed documents will be needed for all the directors and the shareholders for the company incorporation. Listed below are the documents that are accepted by MCA for private Limited Company registration
Identity & Address Proof:
- Copy of Pan Card of Director
- Voter Id card or Driving License or Passport
- Any one of: Bank Statementor Electricity Bill or Mobile Bill (not older than 2 months)
- Passport Size Photograph of Directors
Proof of Registered Office:
- Conveyance/ Lease deed/Rent Agreement etc. along with rent receipts (any one)
- Copy of the utility bills (Telephone/Gas/Electricity bill) (not older than two months) (any one)
- NOC from Landlord
Below listed are the deliverables if you get your One Person Company registered from LegalKart:
- DSC & DIN for 1 Director
- Company Name Approval
- MOA + AOA
- Incorporation Certificate
- Company PAN Card
- Company TAN Number
- Bank Account Opening Document Support
Frequently Asked Question
Do I need to be physically present during this process?
No, OPC Registration is a fully online process. As all forms are filed electronically so you don’t need to physically travel. You would need to send us scanned copies of all the required documents.
Can foreign nationals incorporate a company under OPC?
No, foreign nationals cannot incorporate a company under OPC.Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC
What is a Digital Signature Certificate? Who shall procure it?
Digital Signature Certificate is provided in the form of a token issued by Certified Authorities. Any form filed for online company registration in India shall be submitted after affixing the DSC of an Applicant. Also, the directors will require DSC for DIN application and the subscribers to MOA shall possess DSC for submitting e-forms for incorporation.
Is it necessary to obtain DSC for all the directors of a company?
As per Companies Act, it is mandatory for all the directors of the company to obtain DSC to verify the authenticity of all the documents filled.
Whether a corporate body can become member or nominee in an OPC?
No, only an individual can obtain membership or become the nominee in OPC. If a corporate body wants 100% stake of any company, it can register a wholly owned subsidiary.
Can one register a One Person company on their home address?
Yes, one can register a private limited company on their home addressin India.You will require to submit a copy of the utility bill the same address alongwithwith the NOC from the landlord for Private Limited Company Registration.
When is it required to convert an OPC into Private Limited Company?
It is required to convert an OPC into a Private or Public Company when the paid-up capital of the OPC exceeds 50 lakh Rupees, or the Average Annual Turnover during the relevant period exceeds 2 Crore Rupees. The mandatory conversion will take effect irrespective of the period of existence of OPC.
Can I convert OPC into Private Limited Company after registration of One Person Company?
An OPC can be converted into Private or Public Company upon completing 2 years from the date of Incorporation unless it is a mandatory conversion.
Is it possible for OPC to trade shares?
No. A One Person Company by definition is a privately owned company and thus its shares are not open for trading in the public domain.
Does a OPC require renewal every year?
No, an OPC does not require renewal every year. An OPC continues its existence until it is closed down officially by its owners.
What our users have to say
I was planning to buy a plot in Nagpur. Before buying the land, I wanted to get all the documents verified and ensure it is free of fraud and forgery. LegalKart undertook every step carefully and their team was very responsive. I am impressed by their professionalism and would highly recommend their service.
Kishore Kamble, Pune
I had purchased a flat in Bangalore. The builder had delayed possession from the committed date. I was paying a high EMI and rent which increased my monthly cash outflow and this left me with no money at the end of the month. I was very stressed and didn’t know what to do. I came across LegalKart and their Property Expert Lawyer advised me to send a legal notice to the Builder and also appeal to the RERA for the delayed possession. I got compensation from the builder for the delay and finally also got possession of my flat.
B. Sivakumar, Bangalore