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Overview of One Person company
Overview of
One Person company
In India, a One Person Company (OPC) is an unique kind of corporate structure where one person serves as both the company's director and sole owner.In an OPC, there is only one shareholder who has control over all aspects of the business and is personally liable for its debts. The OPC concept was introduced in India in 2013 to provide a simpler and more flexible business structure for solo entrepreneurs. Although there is only one owner, an OPC has limited liability protection and is a different legal entity from its owner, thus the owner's personal wealth is usually not at risk in the case of the company's failure.
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Benefit of one person company registration
The benefits of registering a One Person Company (OPC) include:
Limited Liability Protection:
OPC provides minimal liability protection, thus in the case of the company's failure, the owner's personal assets are typically not at risk.
Separate Legal Entity:
Because an OPC is regarded as a separate legal entity from its owner, it is capable of settling disputes, bring legal action, and be sued on its own behalf.
Ease of Management:
An OPC requires minimal compliance and formalities, making it easier for a single person to manage the company.
Single Director:
An OPC requires only one director, making it a simple and straightforward businesss structure for solo entrepreneurs.
No Minimum Capital Requirement:
An OPC has no minimum capital requirement, which enables the owner to launch the company using a small amount of funding.
No Compulsory Requirement of Audit:
An OPC is exempt from the compulsory requirement of audit if its turnover is below a certain limit.
Continuity of Business:
An OPC offers continuity of business even in the event of the death of the owner, as the legal heir can take over the ownership and management of the company.
Eligibility Criteria for One
person company registration
The eligibility criteria for registering a One Person
Company (OPC) in India are as follows:
Company (OPC) in India are as follows:
Indian Citizen and Resident:
The sole owner and director of the OPC must be an Indian citizen and resident.
Indian Citizen and Resident:
The sole owner and director must be at least 18 years old.
Age:
In the event of the owner's death or illness, the OPC must choose a nominee to continue to own and run the business.
Maximum Number of OPCs:
An individual can only be the sole owner and director of one OPC.
Other Requirements:
The owner and nominee of the OPC must not be a director in any other company. The owner must not be a member of any other OPC.
Note: These requirements may vary based on the jurisdiction and it's advisable to seek professional help in navigating the process.
Document required for One person Company registration
The following documents are typically required for registering a One Person Company (OPC) in India:
- Proof of Identity (PAN Card) and Address (Aadhaar Card/ Passport/ Voter ID) of the Director
- Address Proof of Registered Office
- Digital Signature Certificate (DSC) of the Director
- Nominee's Identity and Address Proof
- Consent of Nominee in the prescribed form
- Memorandum of Association (MOA) and Articles of Association (AOA) of the company
- No Objection Certificate (NOC) from the owner of the premises, in case the registered office is taken on rent
- Note: Requirements and procedures may vary based on the jurisdiction and it's advisable to seek professional help in navigating the process.
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One Person Company
Procedure of One person company registration
The procedure for registering a One Person Company (OPC) in India typically involves the following steps:
- 1. Choose a business name and get it approved by the Registrar of Companies (ROC)
- 2. Apply for Director Identification Number (DIN) for the director and obtain a digital signature certificate (DSC)
- 3. Submit the Incorporation Form (SPICe) along with necessary attachments to the ROC
- 4. Obtain PAN and TAN for the company
- 5. Open a bank account in the company's name
- 6. File the Annual Compliance with the ROC
Note: Requirements and procedures may vary based on the jurisdiction and it's advisable to seek professional help in navigating the process.
Restriction On one person company registration
There are some restrictions on registering a One Person Company (OPC) in India, which include:
Cannot be converted into a public company: An OPC cannot be converted into a public company, which limits its potential for growth and expansion.
Cannot carry out Non-Banking Financial Investments:An OPC cannot carry out non-banking financial investments or act as a holding company.
Maximum Number of OPCs: An individual can only be the sole owner and director of one OPC.
Maximum Paid-up Capital: An OPC has a maximum paid-up capital of Rs. 50 lakhs or such higher amount as may be prescribed, subject to the condition that the paid-up capital of the company at no time exceeds Rs. 50 lakhs.
Turnover Limitation: An OPC is exempt from the compulsory requirement of audit if its turnover is below a certain limit.
No power to issue sweat equity shares: An OPC cannot issue sweat equity shares.
No power to issue bonus shares:An OPC cannot issue bonus shares.
PSR Compliance Assistance
The process of registering a One person company involves adhering to many requirements, preparing documents, and complying with pre-incorporation and post-incorporation compliances. Moreover, complying with specific MCA mandates is imperative to avoid incurring hefty penalties and late fees. This process can seem daunting and confusing without professional assistance. PSR Team provides expert service in the online registration process of one’s company on the MCA website. Our team of experts will assist you every step of the way in your journey to get your company registered.
Frequently Asked Questions(FAQ's)
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01. What is a One Person Company (OPC)?A One Person Company (OPC) is a type of company that has only one person as its member and shareholder. It is registered under the Companies Act, 2013.
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03. Can a foreign national or NRI form a One Person Company (OPC)?Yes, a foreign national or NRI can form a One Person Company (OPC) in India after fulfilling certain conditions, such as appointing a nominee who is an Indian resident.
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05. What is the minimum capital requirement to start a One Person Company (OPC)?The minimum capital requirement to start a One Person Company (OPC) is Rs. 1 lakh.
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07. What are the documents required for One Person Company (OPC) registration?The documents required for One Person Company (OPC) registration include PAN card and Aadhaar card of the sole member, passport size photographs, address proof of registered office, and MOA and AOA.
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02. What is MOA and AOA?MOA stands for Memorandum of Association, which defines the company's objectives and scope of operations. AOA stands for Articles of Association, which defines the company's internal regulations and management structure.
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04. Total Time to register a One Person Company (OPC)?The registration process of a One Person Company (OPC) usually takes around 7-10 days, subject to government processing time and document verification.
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06. What are the tax implications of a One Person Company (OPC)?A One Person Company (OPC) is liable to pay income tax on its profits at the applicable rate. Taxes must be paid by the company's shareholder on dividends they receive from the business.
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08. What is the annual compliance requirement for a One Person Company (OPC)?A One Person Company (OPC) is required to comply with various annual filing requirements, such as filing of annual returns, financial statements, and income tax returns, as per the Companies Act, 2013.