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Here’s How to Register a One Person Company in India

Only one person owns the One Person Company (OPC) yet enjoys limited liability. This concept has been introduced by The Companies Act, of 2013. Thus, the owner can be the shareholder besides being the owner and get the legal benefits provided by a Private Limited Company. However, before this act, sole proprietorship was the only option for the sole business owner.

What is One Person Company (OPC)?

An OPC consists of a single person performing the role of the director, member and owner, which resembles a Limited Liability Company in India. The motive behind this facility is to boost the MSMEs to get recognised and let the entrepreneurs take a step ahead. Remember to appoint a nominee before the incorporation of the company. The minimum legal capital for the company should be Rs. 1 lakh (USD 1,195).

6 Steps to Register One Person Company in India

The MCA portal helps you register One Person Company in India online. However, make sure that you have the required documents.

Step 1: Digital Signature Certificate (DSC)

A Digital Signature Certificate (DSC) for the member and the director of the OPC.

Step 2: Director Identification Number (DIN)

The Director Identification Number (DIN) is required for the director of the OPC from the MCA.

Step 3: OPC Company Name Reservation

Find an appropriate name according to the Companies (Incorporation Rules), 2014, for your OPC and register it using the SPICe+ form on the MCA portal.

Step 4: MoA and AoA Form Filling

The Memorandum of Association (MoA) is the legal document that specifies the objectives of the company and its relationship with the shareholders. Only the activities mentioned in the MoA should be undertaken by the company. Meanwhile, Articles of the Association (AoA) contain internal guidelines to be followed by the company while achieving the objectives mentioned in the MoA.

Step 5: Filling Other Required Forms

Fill out all the required forms and submit your application for the OPC registration process. PAN and TAN numbers are during the incorporation of your company. Once you submit your application for OPC registration on the MCA portal, it will be overseen by the Registrar of Companies (ROC).

Step 6: Certificate of Incorporation

The ROC issues the certificate of incorporation after a successful registration. This registration process takes over 10 days. You may consult professional tax consultancy services to avoid mistakes.

Documents for the OPC Registration Process

Proof of OPC’s registered office address.
The owner of the registered office must provide a No Objection Certificate (NOC) and proof of ownership.
A declaration of the following of all compliances by the professional.
The director of the OPC should present the consent and declaration of the DIR–2 form and the INC 9 form.
Director’s DIN.
MoA and AoA of the OPC.
PAN card, passport-size photograph, email ID, contact number, DSC, address proof and Aadhaar card of the shareholder and director.
Rental agreement of the rented property and the NOC of the owner.
Recent utility bills obtained in 2 months.

Forms to Register One Person Company in India

Registration of an OPC comes with filling out different forms to comply with all required rules.

1. Form INC – 3

It is the OPC nominee consent form. Only one person acts as the director of the OPC. Thus, he must appoint a nominee who will handle the business in his absence, during his illness or after his death. So, the director of the OPC should fill out Form INC – 3 and submit an Aadhaar card and PAN card.

2. The INC 9 Form

The director of the OPC must submit a declaration of not being convicted under any law and has not been blamed for an offence.

3. The DIR – 2 Form

The DIR–2 form acts as the consent by the director of the OPC to comply with the rules stated by the Companies Act, 2013.

4. SPICe+ Form

The web-based SPICe+ Form has replaced the traditional SPICe form. It helps the owners incorporate the company electronically and comes in two parts.
Part A helps you apply for the DIN and PAN numbers and most importantly, company name approval. Part B of the form contains important details of the company such as the share capital, shareholder details, details of the director and the registered address of the OPC.

5. Form AOC 4

The member of the OPC should file annual financial statements via Form AOC 4 with the Registrar of Companies (ROC).

6. Form MGT 7A

Annual return details are to be filed with Form MGT-7 which comes under the MCA. MGT 7A is specifically for small companies.

Smooth, Secure & Swift Support For OPC Registration Under One Roof!

Eligibility Criteria for OPC Registration

The Companies Act sets the eligibility criteria for the registration of an OPC as follows:

The person should be an Indian citizen and have been residing in India for at least 182 days.
It should only be a natural person and not a legal entity.
Only an adult can be a member of an OPC.
The minimum stated authorised capital is Rs. 1 lakh (USD 1,195).
The OPC becomes a Private Limited Company if it exceeds an annual turnover of Rs. 2 crores (USD 239,150) or the paid-up share capital of Rs. 50 lakhs (USD 59,789).
An OPC should not be involved in investment, insurance or banking.

Advantages and Disadvantages of OPC

ADVANTAGES	DISADVANTAGES
Liabilities are limited only to the shares. Easy decision-making and no liabilities for the company’s loss.	No members can be added. Otherwise, it will no longer be an OPC.
Easy fundraising because organisations tend to trust a company more than a firm.	Suitable for smaller businesses.
The director and the members of the OPC cannot get sued by the creditors. However, the company does get sued.	Restricted non-banking financial investments.
Only 1 director, 1 nominee and 1 member are needed and no minimum paid-up capital.	No aim for charity allowed.
Unorganised business practices because the single member can make any decision.	Dissolving an LLP can be complex, especially without an agreement.

Conclusion

The One Person Company (OPC) resembles an LLP company yet has fewer restrictions. However, it can be filled out online using the MCA portal, but consulting a professional is recommended here to avoid legal problems. Remember that you cannot form an OPC if you are an NRI, a minor or a foreign national. Similarly, if it surpasses a certain threshold, it will be termed as a Pvt. Ltd. company.

FAQs

What Procedure Do I Follow to Convert My OPC to a Pvt. Ltd. Company?

An OPC requires a single member, a director and a nominee. If this number increases, the OPC will be turned into a Pvt. Ltd. Company. In that case, all creditors should give written consent. It will be followed by further legal formalities.

What if an OPC Does Not Fill the AOC 4 and MGT 7A Forms?

If an OPC does not fill the MGT 7A and AOC 4 forms before the due date, the OPC will face a penalty.

How Many Times Should the Board Meeting be Organised in an OPC?

One board meeting should be conducted in an OPC at least once in six consecutive months. In the case of frequent meetings, there should be at least 90 days between the two board meetings.

What Rules Should Be Followed by an OPC?

An OPC should get the financial statements audit done and file for tax returns. Similarly, the company should have a properly maintained book of accounts.

What Restrictions Does an OPC Face?

An OPC cannot raise funds through shares or convertible debentures, otherwise, it will be called a Pvt. Ltd. company.