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What Is A One Person Company (OPC) In INDIA?

An OPC is a separate single-person economic entity. It is a combination where the company enjoys the benefits of sole proprietorship and the private company form of business with a minimum investment of one lakh rupees( however this requirement is recently eased out with no minimum investment amount requirement).

It can be established in accordance with the guidelines of the Companies Act of 2013 by a natural person who is an Indian citizen or a resident of India (a person who has lived in India for at least 120 days during a single fiscal year).

What Are The Different Types Of One Person Company In INDIA?

• A Company limited by shares:

It gives the OPC the complete autonomy to act on its own since it can exist independently. The company enters into a contract with the director i.e the sole member and is its liability is only obligated to amount of its share as per the memorandum.

• A Company Limited by guarantee:

In this structure the company’s memorandum limits the Director of the OPC to guarantee such amount or asset towards the company in the event of debt or winding up.

• An Unlimited Company:

The director of the OPC enjoys unlimited liability from the company.

What Are The Benefits Of Incorporating A One Person Company In INDIA?

A Separate legal entity: One of the most important features of OPC is that it is an independent legal entity. The company’s identity continues unless it is dissolved or wound up.

Limited liability: the Director is protected and not personally liable for the debts & obligations of the Company.

Low capital: The authorized capital to form an OPC is Rs. 1 Lakh with no minimum paid-up capital.

Perpetual structure: An OPC is not dependent on its members or director in case of death or instability and safeguards the company affairs by transferring the rights to the nominee.

Minimum Compliance: The Companies Act provides minimum legal compliance and paper works as compared to other company structures.

Efficient decision-making: The director is the only individual in charge of the company since he makes all of the decisions and the question of majority opinion does not arise, Therefore the decision-making is quick and efficient.

What Are The Documents Required For The Incorporation Of A One-Person Company In INDIA?

The following documents are necessary to form an OPC in India:

• A Digital Signature (DSC) and Director Identification Number (DIN) of the proposed director. 
• The company's draft of the Memorandum of Article of Association(MOA) and Article of Association(AOA).
• Particulars of the director, proof of identity and residential address (Aadhar, PAN, Passport, Voters Card, Bank passbook etc).
• Particulars of the Nominee with its DIN Number (if available) or Valid PAN and other proof of identity and residential address like Aadhar, Voters card and  Bank passbook etc).
• Nominee consent form duly signed by the nominee expressing its willingness to join the OPC company.
• The address of the registered office of the company along with the ownership proof, for rented premises a NOC from the owner and the Rental agreement.
• The Trademark certificate: if the proposed name of the company is trademarked.
• Company’s Bank Account: the MCA has made it mandatory to open a company’s Bank account through the AGILE-PRO linked web form.

Step By Step Guide To Register A One Person Company In INDIA?

With the introduction of the SPICe+ form by the Ministry of Corporate Affairs, the registration process has been effectively simplified. The said form comprises of two parts Part A and Part B and can be filled in combination or simultaneously.

Step 1:Acquiring a Digital Signature Certificate (DSC) and Director Identification Number (DIN) 

At first, the most vital step is to obtain a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) for the Director and the Nominee. A DSC is an government authorized electronic signature that secure and authenticates document and a DIN is a a unique identification which all directors of companies registered in India must obtain.

Step 2: Register in SPICe + Web form;

Login to https://www.mca.gov.in > MCA Services > Company e-filing> incorporation & Change Service > SPICe+ and register yourself.

Step 3: SPICe+ Form. Part A (Name Reservation)

Fill out PART A of the SPICe+ form first by entering the necessary details of the proposed company like type, class, category, disruption, proposed name etc of the company. Two uncommon names can be proposed for the purpose of name reservation but in case of name reservation and incorporation, only one name would be required. Eg. XYZ(OPC) Pvt. Ltd. In case the proposed name is trademarked, you will have to attach the document for the same.

Step 4: Auto Check and Proceed.

Run auto check of the proposed name and after receiving information confirm the name and proceed towards proceed to continue towards incorporation in the SPICe+ Part B form.

Step 5: Part B of SPICe+ Form (Incorporation applications)

After the reservation of the company name, proceed with the incorporation as stipulated in part B of the SPICe+ form. 

Step 6: Fill out the form and add a nominee

Enter the necessary details like company assets, particulars of the director, Registered office etc and add a nominee for the OPC which is mandatory. Enter the particulars of the DIN of the Nominee for verification if the nominee doesn’t have a valid DIN, verification can be done by way of PAN Card along with other mode of identification like Aadhar, passport, bank passbook etc. 

Step 7: Fill out the linked forms.

The forms that are linked are:

• eMOA: the OPC has to submit a Memorandum of Association stating the company’s objective in a PDF attachment.
• eAOA: the OPC has to submit the Article of Association stating the company’s rules and regulations in a PDF attachment.
• URC -1 form: This is an application form to register a business entity that is mandated by the Companies Act, 2013.
• AGILE PRO form - It is a mandatory requirement to open a company account through the AGILE -Pro linked web form. 

Step 8: Declaration.

Fill out the Deceleration by entering the certificate number of the practising professional (Advocate, Chartered Accountant, Company Secretary) who was engaged during the formation of the company. This form shall be auto-generated in PDF and should be submitted in electronic form.

Step 7: Digitally sign the form.

Download the PDF once the form B is submitted successfully. Then proceed to affix the Digital signature affix the digitally signed application along with the linked forms.

Step 8: Generate PAN and TAN Numbers.

It is a mandatory requirement to acquire a PAN Number and Tax Deduction and Collection Number (TAN) for the company which would be automatically generated. 

Also Learn: What is a Limited Liability Partnership or LLP

Step 9: Registration Charges.

If the capital is Rs. 15 lakh, the registration is nil; if the capital is more than Rs. 15 lakh, the registration fees increase to Rs. 500. The registration charges for the MOA and AOA would also be charged separately as per the authorized capital of the company and the stamp duty applicable would be with respect to the state where the company is being registered.

A certificate of incorporation would be issued by the Registrar that the proposed company is incorporated under the Act.

Also Learn: A Quick Guide to Pvt Limited Company

How Much Time Does It Take To Incorporate A One Person Company In INDIA?

The Registration process varies and usually takes 7-10 working days provided that there is no difficulty faced from the government website during the registration process and you had all the documents ready with you.

Also Learn: 7 Proven Strategies for Tax Planning For Corporates

Frequently asked questions (“FAQs”) on One Person Company

1.What kind of companies are One person companies in India?

A One Person Company is a single person company combining sole proprietorship and a private company with limited liability along with a separate legal identity to the company. 

2.Can we have more than one, One Person Company in my name?

No, a person cannot register for more than one, One Person Company as per the Companies Act, 2013.

3.What does incorporation of One person company mean?

It means formation of a One person company in accordance with the norms under the Companies Act, 2013.