One Person Company Registration | OPC Registration | Documents

What is One Person Company Registration

A One-Person Company Registration is that has only one person as a member. OPC Registration was introduced to encourage individuals who are capable of starting their own business. OPC enables a sole proprietor to convert his firm into a Limited Liability company and avail the benefits of a Company. It is a business structure that enjoys the benefits of both forms of business i.e. a Sole proprietorship and a company. Thus, it eliminates the hassles of finding the right kind of co-partner/s for starting a business as a registered entity.

As Per Section 2(62) of the Companies Act, 2013, One Person Company means a company that has only one person as a member. One Person Company is bringing the unstructured Proprietorship Business into the structured version of a private company. OPC is opening the path for sole proprietors and Start-Ups.

Benefits of One-Person Company Registration

One Person Can Start The Business : Under OPC, one person can start the business with very little compliance. Due to fewer compliances, a person gets more time to focus on his business and key areas.
Complete Control By The Individual : The control remains in the hand of one person only.
Limited Liability : In case of One Person Company, the member of OPC has limited liability.
Separate Legal Entity From Its Member : Being a company, OPC has a separate legal existence from its member.
Easy Compliance And Tax Flexibility : An individual has to follow easy compliance and avails the benefit of tax availability too.
Benefits For Small Scale Industries : OPC avails the benefits provided to Small scale industries like easy funding, less compliance, loans at a lower interest rate, etc.

What are the Eligibility Criteria for One-Person Company Registration?

A natural person can form OPC who is a resident of India in the preceding calendar year.
Only 1 member can form an OPC.
The Name should be unique and should not be similar to any other existing company and trademark.
An individual cannot incorporate more than 1 OPC or
An individual cannot be the nominee of more than 1 OPC.
There must be a least 1 director.
In the case of OPC, the threshold limit of paid-up capital is Rs 50 lakh and the Average Annual turnover is Rs 2crore in the immediately preceding financial year. However, as per latest budget now there is no restriction on paid up and turnover limit.
One Person Company must include in its name (OPC) Private Limited.
Pre-condition to indicate the name of the other individual as a nominee. As in the event of the death of the subscriber, a nominee becomes a member of the One Person Company.

What Documents are Required for OPC Registration?

Below-mentioned documents are required for OPC Registration:-

For DSC Application

Passport size photo of the applicant.
Copy of Id and Address Proof.
Email Id and Phone number
Specimen Signature

Documents Required For SPICe+ Form

Identity proof
Address proof & Identity proof and of the nominee and the subscriber

Note-For Residential proof, the applicant can provide any of the following documents:-

Copy of Current Bank Account Statement, Phone Bill, or Electricity Bill)
Copy of Rent agreement and No-objection Certificate from the property owner.
If the property is owned-Copy of the sale deed.
Memorandum of Association and Articles of Association
Declaration by the Subscribers and Directors
Proof of Office Address
Copy of Electricity or Utility Bills. However, it should not be older than 2 months.
Nominee’s Consent in Form INC-3
Disclosure of Director’s Interest and any other document (if required).

FAQ- Frequently Asked Question

Who can register for an OPC?

OPC company registration can be done only by Indian residents, and that too only one at a time, as per the specifications of the Ministry of Corporate Affairs.

What are the mandatory requirements of an OPC?

All such businesses must maintain books of accounts, comply with statutory audit requirements and submit income tax returns and annual filings with the RoC.

How much capital is required to start an OPC?

There is no difference in capital requirement between an OPC and a private limited company. It needs an authorized capital of ₹1 lakh, to begin with, but none of this actually needs to be paid up. This means that you don’t really need to invest any money into the business.

What are the tax advantages available to an OPC?

No general advantages; though some industry-specific advantages are available. Tax is to be paid at a flat rate of 30% on profits, Dividend distribution tax applies, as does minimum alternate tax.

How much does it cost to run an OPC?

The cost of an OPC is only marginally lower than that of a private limited company. You’ll be shelling out around ₹12,000 to incorporate, then paying around ₹15,000 a year in compliance fees and an auditor to inspect your books.

How many directors can there be in an OPC?

An OPC has certain limitations. The person starting the business is its only director and shareholder. There is also a nominee director, but this person has no power whatsoever for raising equity funds or offering employee stock options. The nominee exists only to take over in case of the death or incapacitation of the director. The nominee is chosen by the director and can be anyone, such as your spouse, parents, or siblings. The nominee will need to provide identity proof during registration.

Can I start more than one OPC at a time?

No, an individual can form only one OPC at a time. This rule applies to the nominee in an OPC, too.

If you want to get started with OPC Registration, reach out to Chartered Accountants from CA in Delhi‘s homepage

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