One Person Company (OPC)

One Person Company (OPC) Registration in India

E Accountax Manager provides comprehensive services to help you seamlessly register your One person Company (OPC), ensuring you can focus on building your dream business.

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What is a One Person Company (OPC) in India?

A One Person Company (OPC) in India is a unique business structure that allows a single individual to operate as a separate legal entity, enjoying limited liability protection. It enables entrepreneurs to establish a company with themselves as the sole shareholder and director, providing them with autonomy and flexibility in their business operations. Before the enactment of the Companies Act of 2013, only two individuals could form a company. The Companies Act of 2013 introduced provisions for the formation of OPCs in India, regulating their registration and operation. Unlike a public company, which requires a minimum of two directors and two members, an OPC can be formed with just one director and one member, simplifying the incorporation process.

Key Features of an OPC

Easy Succession: OPCs offer perpetual succession. If the owner of an OPC passes away, a nominee can take over, ensuring the company's continuity. In a proprietorship, the business ceases to exist upon the demise of the proprietor.
Single Ownership: Unlike traditional companies that require a minimum of two shareholders, an OPC can be owned and managed by a single individual.
Limited Liability: The liability of the owner is limited to the extent of their investment in the company, safeguarding their personal assets from business liabilities.
No Minimum Capital Requirement: There is no mandatory minimum capital requirement for forming an OPC, making it accessible to small entrepreneurs and startups.
Less Compliance: OPCs have fewer compliance requirements compared to other types of companies, simplifying administrative burdens for the owner.

Difference Between Proprietorship Firm and OPC

Aspect	Proprietorship Firm	One Person Company (OPC)
Legal Status	Not a separate legal entity; owner and business are one	Separate legal entity distinct from owner
Liability	Owner has unlimited liability for business debts	Owner's liability limited to investment in the company
Ownership	Sole proprietor owns and manages the business alone	Single individual owns and manages the company alone
Continuity	Business ceases upon owner's demise or decision to close	Perpetual succession; business continues after owner's demise with nominee taking over
Formation	Simple and inexpensive; no formal registration required	Registration under the Companies Act, 2013 is mandatory
Compliance	Minimal compliance requirements	Compliance requirements as per the Companies Act, 2013
Transfer of Ownership	Not applicable; ownership is solely with the proprietor	Ownership can be transferred as per company's Articles of Association
Taxation	Taxed as personal income of the proprietor	Subject to corporate taxation laws

Steps to Register an OPC in India

Digital Signature Certificate (DSC): Obtain DSCs for the proposed directors, as these are required for digital filings.
Name Approval: Select a unique name for your company and get it approved by the Ministry of Corporate Affairs (MCA) by filling web form RUN.
Document Submission: Prepare and submit the Memorandum of Association (MoA) and Articles of Association (AoA) along with other necessary documents.
Filing with RoC: File the web form INC-32 along with MOA, AOA, and KYC documents with the Registrar of Companies (RoC).
Certificate of Incorporation: Upon approval, receive the Certificate of Incorporation, which confirms the registration of your OPC.
Obtain PAN/TAN: PAN & TAN of the company will be issued along with the incorporation certificate.

Required Documents to Register an OPC in India

PAN Card of Proposed Directors and Shareholder
Identity proof (Either Passport, Aadhar card, Driving License or Voter ID) of Proposed Directors and Shareholder
Colored Passport size photo of Proposed Directors and Shareholder
Residential Proof (Either Electricity Bill, Telephone Bill or bank passbook) of Proposed Directors and Shareholder
Proof of registered office (Either Rent/Lease agreement or NOC from owner along with electricity bill) of proposed company

Restrictions on One Person Company

Not Suitable for Scaling: While OPC registration suits small business structures well, it may not be conducive for scaling up to larger operations. With OPC, the total number of members is always limited to one, hindering the ability to add more shareholders or raise additional capital for expansion, thereby restricting growth opportunities.
Strict Constraints on Business Activities: OPCs face restrictions on engaging in non-banking financial investment activities, limiting their investment options. This lack of flexibility can impede diversification and growth strategies, constraining business development opportunities.
Lack of Clarity in Ownership and Management: In an OPC, where a single individual serves as both director and manager, the roles of ownership and management are blurred. This absence of clear distinction can lead to challenges in governance and decision-making processes, potentially increasing the risk of unethical practices or conflicts of interest.

Why Choose E-Accountax Manager for Registering an OPC?

Expert Guidance: Our team of experienced professionals provides expert guidance and assistance throughout the registration process.
Timely Execution: We ensure timely execution of all registration procedures, minimizing delays and ensuring a hassle-free experience.
Transparent Pricing: Our pricing is transparent and competitive, with no hidden costs or surprises.
Post-Registration Support: We offer post-incorporation support and guidance to help you navigate any challenges that may arise.

Choosing the right business structure is crucial for the success and growth of your venture. With our comprehensive services and expertise, we ensure that your journey as an OPC owner is smooth and rewarding. Contact us today to learn more!

FAQ

1. What is a One Person Company (OPC)?

A One Person Company (OPC) is a type of corporate entity in India that allows a single individual to own and manage the business with limited liability, offering the benefits of a private limited company.

2. Who can register a One Person Company?

Only a natural person who is an Indian citizen and resident of India can register an OPC. The individual must not be a member of more than one OPC.

3. What are the benefits of forming a One Person Company?

An OPC offers benefits like limited liability, ease of incorporation, reduced compliance compared to other companies, and the ability to run a business as a sole owner with corporate status.

4. What is the process for registering a One Person Company?

The process includes obtaining a Digital Signature Certificate (DSC), applying for Director Identification Number (DIN), reserving a name, filing incorporation documents with the Ministry of Corporate Affairs (MCA), and drafting a nominee consent form.

5. Can a One Person Company be converted into another type of company?

Yes, an OPC can be converted into a private limited company or public limited company after meeting specific conditions, such as crossing a turnover of ₹2 crore or having more than one director.