How do I register for a One Person Company?

Overview

A One person Company or OPC registration is a company registration that is opted and done by a single individual. An individual single-handedly registers, operates, and manages this form of company. OPC registration grants access to all the characteristics of a company like perpetual succession facility, limited liability benefit, and a separate legal company status. 

The Companies Act, 2013 introduced the feature of OPC registration. Before the Companies Act, 2013 was enacted a single person could not register a company. If any person wanted to register and legalize his business, the only option available was sole proprietorship. For company registration there is a clause of having a minimum of two members and two directors to establish a Private Limited Company. 

Now after the Section 2(62) of the Company’s Act 2013 came into effect any individual can register his company with just one member and one director. In a One Person Company, as the name suggests the member and director are the same person. 

So, an OPC is a company registered,  operated, and owned by a single person. It is unique in nature because it grants the benefits of both a sole proprietorship and a company in a single registration. 

The compliance requirements are also relaxed for an OPC and are easier compared to a public limited or a private limited company. OPC business registration format is an ideal model for small businesses. Here in this blog, we will explore the domain of one person company registration in detail. 

Regulation Regarding OPC Registration

• A One Person Company is registered in India according to the Section 2(62) of the Companies Act of 2013. 
• For incorporation of a one-person company, a single member and director must represent the full company.
• The OPC business model requires fewer compliance obligations compared to other business structures. 
• The OPC’s name must follow rules and requirements of the Companies (Incorporation Rules) 2014 also. 
• Other laws applicable to companies are applicable like requirements of DIN/DSC etc. 

Eligibility for OPC Registration

• An OPC can only be incorporated by an Indian resident or a Non-Resident Indian (NRI).
• The membership of OPC is restricted to only one member who is the owner/director. 
• The company name must be unique and not matching to other company names or trademarks.
• Individuals are barred from registering more than one OPC or functioning as a nominee in various OPCs.
• Only one director is required, and it is to be kept in mind that the director and shareholder are the same individual in a One Person Company. 
• The company’s registered name should have “Private Limited” in it added at the end. 
• Appointment of another individual as the nominee is required. This nominee assumes the role of member and director in case of the original member’s death. 

Registration Process for OPC 

The registration process for one person company has been made online. The individual seeking registration needs to visit the MCA portal and follow the given steps to register his OPC:

• The first step in registering any company is to furnish a Digital Signature Certificate (DSC) from a government-authorized Certification Authority. 
• After getting DSC, get a Director Identification Number (DIN), and apply it along with the Director’s information in the SPICe Form.
• File a name request for your OPC using SPICe form. Check the availability of the name on the MCA Portal through the RUN service (INC 32).
• After 20 days of getting name approval, file Form SPICe for the incorporation of OPC with all necessary documents.
• After you have successfully submitted all information and documents, the Registrar of Companies after verification and his satisfaction, will issue a Certificate of Incorporation (COI) of the company. 
• The PAN and TAN of the OPC company are generated automatically at the time of incorporation. 

Benefits of OPC Registration

• Separate Legal Status: OPC incorporation grants a separate legal entity status, protecting the sole individual who established the OPC. The member/director’s liability is limited to the amount of his shares, thus protecting them from being personally responsible for the company’s liabilities.

• Quick Funding: OPC registration facilitates quick access to funds through various channels like individuals, venture capitalists, angel investment, etc. 

• Limited Compliance: OPC registration has to fulfill only limited compliances and exemptions from certain compliance requirements are granted under the Companies Act of 2013. It is optional to maintain a cash flow statement and there is no need for a certificate of Annual Return by a competent authority. 

• Easy Incorporation: The incorporation of an OPC in India is streamlined as no minimum paid-up capital is required and decision-making processes are also simplified owing to only one person performing all duties. 

• Easy Management: Management and operations of an OPC are simplified as only a single individual leads it. This enables fast and final decision-making without internal disputes etc. 

• Perpetual Succession: A one person company functions with a perpetual succession facility, and in the event of the original member’s death or inability to run the OPC, the appointed nominee handles the company’s operations. 

Documents Needed for OPC Registration

Before incorporation, a nominee must be appointed, and their consent must be obtained using Form INC-3. Below is a complete list of documents required for OPC registration in India:

• Member’s Aadhar card.
• Member’s PAN card.
• Member’s Driving license/Passport. 
• Memorandum and Article of Association. 
• Telephone bill.
• Electricity bill. 
• DIN or Director Identification Number
• DSC or Digital Signature Certificate
• Copy of Documents of the Company.
• Rent agreement if the office is located in a rented premises.
• NOC issued by the landlord to use the property as OPC office
• Latest electricity bill
• Latest telephone bill

FAQ’s

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

A One Person Company (OPC) is a type of business structure in which a single individual owns and manages the company. It allows a sole entrepreneur to operate a corporate entity with limited liability.

2. Who is eligible to register for a One Person Company (OPC)?

Any Indian citizen who is a resident of India can register for a One Person Company. Additionally, only natural persons who are not minors can form an OPC.

3. What are the steps to register for a One Person Company (OPC)?

The registration process involves obtaining Digital Signature Certificates (DSC) and Director Identification Numbers (DIN), applying for name approval, drafting the Memorandum of Association (MOA) and Articles of Association (AOA), and finally submitting the incorporation documents to the Ministry of Corporate Affairs (MCA) along with the prescribed fee.

4. What are the documents required for registering a One Person Company (OPC)?

The documents required include identity and address proof of the director, proof of the registered office address, NOC from the owner of the property (if applicable), and PAN card. Additionally, documents like MOA, AOA, and consent of the nominee need to be submitted.

5. How long does it take to register a One Person Company (OPC)?

The registration process typically takes around 10 to 15 days, subject to the timely submission of all required documents and approvals from the concerned authorities. However, the exact timeline may vary depending on the workload of the Registrar of Companies (ROC) and any additional queries or requirements.

Conclusion

In conclusion, the concept of One Person Company registration under the Companies Act, 2013 has provided a significant opportunity for sole entrepreneurs in India to establish a corporate entity with limited liability. The introduction of OPC registration has bridged the gap between sole proprietorship and company registration, offering benefits such as separate legal status, limited compliance requirements, easy management, and perpetual succession.

With simplified procedures and fewer compliance obligations compared to other business structures, OPCs offer a favorable environment for small businesses and individual entrepreneurs to thrive. The eligibility criteria, registration process, and required documents have been outlined to guide aspiring entrepreneurs through the process.