One Person Company (OPC) Registration in India

Online One Person Company (OPC) Registration In India - An Overview

OPC stands for "One Person Company." It is a type of business structure that allows a single individual to operate and manage a company, enjoying limited liability while retaining full control over the company's affairs. The concept of OPC was introduced in India to support and encourage sole entrepreneurs and small businesses. Here's a brief definition of OPC:

An OPC, or One Person Company, is a legal business entity in which a single individual holds 100% ownership and control. It provides limited liability to the owner, meaning their personal assets are separate from the company's liabilities. This structure enables individuals to run a company with limited compliance requirements, making it an attractive option for solo entrepreneurs and small business owners. However, an OPC must nominate a nominee director who will take over the company in case the sole owner becomes incapacitated or passes away.

Steps for Online One Person Company (OPC) Registration in India

Incorporating a Limited Liability Partnership (LLP) in India offers several benefits to business owners, making it a popular choice for many entrepreneurs.
Here are some of the key benefits of LLP incorporation:

• Limited Liability:
  The primary advantage of an LLP is limited liability. The personal assets of the partners are protected, and their liability is limited to the extent of their capital contribution in the LLP. This means that personal assets are not at risk in case the LLP incurs debts or legal liabilities.
• Separate Legal Entity:
  An LLP is considered a separate legal entity from its partners. It can own property, enter into contracts, and sue or be sued in its own name. This legal separation enhances the credibility and stability of the business.
• Flexible Management:
  Partners in an LLP have the flexibility to manage the business as they see fit, subject to the terms outlined in the LLP agreement. This allows for a more customized and efficient management structure.
• Tax benefits:
  LLPs are taxed as pass-through entities, which means that the profits and losses of the LLP are passed through to the partners and taxed at their individual rates. This can be a significant tax advantage for LLPs.
• No Audit Requirement (for Small LLPs):
  

Documents Required for One Person Company (OPC) Registration

The documents required for One Person Company (OPC) registration in India are as follows:

• Identity Proof of the Director and Nominee:(Any one is Following)
  
  • Scan Copy of Voter ID
  • Scan Copy of Driving Licence
  • Scan Copy of Aadhaar Card
  • Scan Copy of PAN Card
• Address Proof of the Director and Nominee:(Any One is Following)
  
  • Telephone Bill
  • Mobile Bill
  • Electricity Bill
  • Water Bill
  • Bank Statement / Bank Passbook with latest transactions
• Obtain Digital Signature & DIN of Director
• Consent of the Nominee:
  This is a document in which the nominee agrees to act as a member of the company in the event of the death or incapacity of the sole member.
• For the registered office:
  
  • Utility Bills
  • Notarized rental agreement in English
  • Notarized rental agreement in English
  • No-Objection Certificate from the property owner
  • Sale deed/ Property deed in english (In Case of owned property).

Checklist for One Person Company (OPC) Registration

Starting and running a one-person company involves several important tasks and responsibilities. Here's a checklist to help you get started and manage your one-person company effectively:

• Minimum and maximum number of members:
  An OPC can have only one member.
• Appointment of a nominee:
  An OPC must appoint a nominee before incorporation. The nominee is the person who will take over the management of the OPC in the event of the death, incapacity, or mental incapacity of the member.
• Consent of the nominee:
  The nominee must give their consent in Form INC-3.
• Name of the OPC:
  The name of the OPC must be unique and must not be similar to the name of any other existing company.
• Authorised capital:
  The authorised capital of an OPC must be at least Rs. 1 lakh.
• Proof of registered office:
  The OPC must have a registered office in India.

Features of One Person Company (OPC)

A one-person company (OPC) is a type of business structure designed to provide the benefits of limited liability while allowing a single individual to operate and manage the business. Below are the key features of a one-person company:

• Easy to set up:
  The process of registering an OPC is relatively simple and can be completed online.
• Limited liability:
  The liability of the member of an OPC is limited to the extent of the share capital invested in the company. This means that the member is not personally liable for the debts and liabilities of the company.
• Separate legal entity:
  An OPC is a separate legal entity from its member. This means that the company can own assets, enter into contracts, and sue and be sued in its own name. The member's liability is limited to the extent of the share capital invested in the company.
• Nominee:
  An OPC must appoint a nominee before incorporation. The nominee is the person who will take over the management of the OPC in the event of the death, incapacity, or mental incapacity of the member.
• Tax benefits:
  OPCs are eligible for certain tax benefits, such as lower tax rates and deductions on business expenses.

Compliance for a One Person Company (OPC)

The Companies Act of 2013 specifies several compliances that must be completed by the given timeframes. The ROC, shareholders, directors, investors, and tax authorities are just a few of the parties whose interests are protected by these laws, which also promote transparency and good governance. These compliances can be broken down into yearly compliances, ongoing compliances, one-time compliances upon incorporation, and compliances based on occurrences. This article has gone into great detail to discuss the first category of one-time compliances.

One Time Compliance

A one-person company must immediately adhere to the special requirements outlined by the Companies Act of 2013 and, if required, obtain local registrations in accordance with the state laws of the region in where the OPC is operating. Below is a list of all compliances and their associated due dates. Get in touch with one of our startup advisers for detailed conversations.

Restrictions of One Person Company (OPC)

One Person Company (OPC) is a legal business structure in India that allows a single individual to operate and manage a company. Here are some of the key restrictions and requirements for OPCs in India:

• No public funding:
  An OPC cannot raise funds from the public through the issuance of shares or debentures. It can only raise funds through loans or non-convertible debentures.
• Limited business activities:
  An OPC cannot carry out certain business activities, such as:
  • Non-banking financial investment activities
  • Insurance activities
  • Activities that are regulated by specific statutes
• Mandatory conversion:
  If the paid-up capital of an OPC exceeds ₹50 lakh or its average annual turnover of the immediately preceding three consecutive financial years exceeds ₹2 crore, the OPC must mandatorily convert itself into a private limited company.

Advantage of One Person Company (OPC)

One Person Company (OPC) in India offers several advantages to entrepreneurs and small business owners who want to establish and run their businesses with limited liability. Here are some of the key advantages of registering as an OPC in India:

• Limited Liability:
  The primary advantage of an OPC is limited liability. The liability of the sole owner is limited to the extent of their share capital. This means that the personal assets of the owner are not at risk in case of business debts or losses.
• Ease of Formation:
  Setting up an OPC is relatively easy and involves less paperwork compared to other business structures like private limited companies. It requires only one person to form the company.
• Enhanced Credibility:
  Being registered as an OPC can enhance the credibility and reputation of the business, making it easier to attract investors and customers.
• Access to Funding:
  OPCs can raise capital by selling shares, taking loans, or attracting investments from angel investors or venture capitalists. This makes it easier to secure funding for business growth.
• Ease of Management:
  With only one owner, decision-making and management are streamlined, allowing for quicker and more efficient operations.
• Ownership Control:
  The sole owner of an OPC has full control over the company's operations and decision-making.

FAQS