One Person Company Registration
One Person Company is a company that holds a single person as a shareholder and can be contrasted with private companies. These companies get all the advantages of a private company, such as having access to credits, limited liability, legal protection, bank loans, etc.
To avail our services, we charge 499/- as an advance or security payment.
An OVERVIEW-OF ONE PERSON COMPANY REGISTRATION
One Person Company is a farsighted concept for big entrepreneurial dreams or someone who wishes to incorporate micro-businesses but has no sources, time, or means to attract more partners to achieve the business plan. Moreover, OPC Registration’s idea can be considered a combined structure of the Sole proprietorship and Private Limited Company.
Hence, the concept of One Person Company enjoys the best of two worlds.
WHAT IS A ONE PERSON COMPANY REGISTRATION?
One Person Company (OPC) can be established by just a single person who will be considered the owner and the Company’s Director. This idea was founded under the provisions of the Companies Act, 2013. Besides, a One Person Company is a kind of sole proprietorship firm in the structure of a company that grants total authority to a single person to run a business while restricting his liabilities and duties for the business. Moreover, according to section 2 (62) of the Companies Act, 2013, a company with only one person as its Director and shareholder will fall under the ambit of One Person Company or OPC.
what are privilege of one person company
Benefits and the advantages attached to the idea of registration of One Person Company Registration:
- No Minimum Capital Requirement: In One Person Company Registration, there is no fixed capital or minimum amount required. But, the maximum authorized capital must not reach above the limit of Rs. 50 Lakhs in the case of a one person company in India.
- Limited Liability: Another essential benefit affixed with the notion of One Person Company registration is “Limited Liability.” This means the liability of the concerned Director is limited to the extent of capital contributed by the business. Moreover, the personal assets and belongings of the Director will not be attached in case of any loss incurred in the business.
- Fewer Compliances: Compared to any other company, the compliance requirements are very less in One Person Company Registration. So, OPC registration can be done quite easily with minimum paperwork.
- Perpetual Succession: The term continuous succession means that the death or sickness or any director’s inability will not influence the ongoing affairs of the business as the nominee will hold the position of member and Director in the Company.
- Greater Creditability: One Person Company is bound to get its books of account audited annually. Which will, in return, increase the business reliability also customer and vendor satisfaction.
- No Legal Disputes: It is important to note that it ends the possibility of any future legal conflicts between the Director or any third party whenever a company registers itself as a Person Company.
- Privileges for Small Scale Industries: One Person Company can enjoy all the advantages granted to the small industries. These profits include easy funding that, too, without installing insurance security to certain managed limits, loans on lower interest rates, privileges for foreign trade policy, etc. Hence, these benefits play an important role in the growth and development of the One Person Company in its opening days of incorporation.
MINIMUM REQUIREMENTS FOR THE REGISTRATION OF ONE PERSON COMPANY
The minimum requirements to fulfilled for the registration of a One Person Company are as follows:
- To Establish a One Person Company, only a single person who is a residing Indian citizen is required. This means the mentioned person must’ve lived in India for more than 182 days in the previous financial year.
- Other Business Forms like a Company or an LLP are not allowed to join a One Person Company.
- The nominee should be selected at the time of incorporation.
- The minimum authorized capital should be at least Rs 1 Lakh.
- An OPC is limited from performing a minor as its member.
- In OPC, if the annual turnover passes the limit of Rs 2 crore or has the paid-up share capital above Rs. 50 lakhs, in that case, within six months it needs to be converted into a private limited or a public limited
- In One Person Company, all you need is one nominee and one Director.
DOCUMENTS NEEDED FOR INCORPORATING A ONE PERSON COMPANY
The documents needed for the registration of a One Person Company in India are listed:
- Soft Copy of the owner’s PAN Card
- Owner’s Passport-sized photograph
- Soft Copy of the Aadhaar Card/ Voter identity card/ Driving License of the owner.
- Soft Copy of the Rent agreement (If in case a rented property)
- Soft Copy of Electricity Bill or Water Tax Receipt under the name of Registered Office.
- Soft Copy of the Property papers or the ownership proof (In the case of an owned property)
- No-Objection Certificate(NOC) from the actual owner.
steps to register a one person company registration
Listed below are the steps included in the registration of an OPC:
- Acquire DSC and DIN: The primary step is to obtain a DSC (Digital Signature Certificate) and DIN (Director Identification Number).
- Reservation of Name: To reserve your desired name for the Company, you need to fill the Form No. INC-1. Later, the Company’s name will have a suffix “OPC Pvt Ltd.” Besides, there are two ways of reserving a name. One is by filing an application in Form SPICe 32 or using Reserve Unique Name (RUN) Web service of the Ministry of Corporate Affairs (MCA) by implementing one preferred name and a reason for reserving it.
- Terms of Entrenchment: If in case the Articles of Association (AOA) of the said Company carries a requirement for entrenchment. The concerned Company needs to inform the Registrar about such provisions in Form No.INC-2. The Form involved must be filed at the time of the Company’s establishment. Still, the same can be done just by improving an article of association in the case of enduring companies, and moreover, the same shall be listed in Form No. MGT-14 within 30 days starting from the date of entrenchment of the articles.
- Application for One Person Company R: To register a One Person Company, the promoters must apply with the Registrar of Companies (ROC) within whose province or territory the concerned Company’s registered office is proposed to be located. The Application for the Incorporation must be recorded in Form No.INC-2.
- The signing of MOA and AOA: The Memorandum of Association*(MOA) and the Article of Association(AOA) of the concerned Company shall mandatorily be signed by the Company’s sole owner. This sole owner is also a subscriber to the said Memorandum. Moreover, the owner is obliged to provide details like name, description, occupation, and address, in the appearance of at least one witness who will also be needed to provide his basic information and attest his signature.
- Affidavit of the Director and the Subscriber: In the next step, a properly approved affidavit must also be submitted to a sole member who has subscribed to the Memorandum of Association (MOA) and named in the Articles of Association (AOA) in Form No. INC-9.
- Particulars of Subscribers: Moreover, the owner must file the particulars of agreement with the Registrar of Company at the establishment time.
- Declaration by Professionals: In the next step, a statement issued either by an Advocate, CA, Cost accountant, or CS in practice needs to be filed in Form No. INC-8.
- Submission of the Forms and Documents: All the documents required will be attached to the SPICe Form, SPICe-MOA and SPICe-AOA, and the Digital Signature Certificate(DSC) of the Director, and same will be uploaded to the Ministry of Corporate Affairs(MCA) website for the approval. Further, after uploading the documents, Form 49A and 49B will be generated, which will be used to generate the PAN and TAN of the concerned Company. Furthermore, the said forms are to be uploaded to the Ministry of Corporate Affairs after attaching the DSC of the proposed Director.
- Issuance of the Certificate of Incorporation: Once the verification process is completed, the ROC (Registrar of Companies) will give a Certificate of Incorporation for the origin of the business.
FORMS REQUIRED FOR GETTING ONE PERSON COMPANY REGISTRATION
To complete the process of One Person Company Registration, the mentioned below Form must be filled:
- Consent of Director in the form DIR-2.
- MOA (Memorandum of Association) and AOA (Article of Association) Subscriber Sheet.
- No-Objection from the actual owner.
- Application for the Company Registration.
- Digital Signature Form.
- Declaration of Promoter in the form INC-9.
- Declaration of the Promoter-Non-Deposit under the FEMA (Foreign Exchange Management Act) and SEBI (Securities Exchange Board of India).
TaxATION RULES APPLICABLE TO A OPC
The taxation rules applicable to a one-person company are mentioned below:
- The Company must file annual (IT) Income Tax Returns.
- Tax Deducted at Source(TDS) is to be filed quarterly by mentioning the TAN.
- Getting an Employee State Insurance(ESI) registration is mandatory for an OPC if in case it employs more than ten persons.
- Under the tax rates slab, the income of an OPC is taxed at 30 percent of its entire income in the financial year.
EXEMPTIONS AVAILABLE AFTER OBTAINING ONE PERSON COMPANY REGISTRATION
Following listed are the exceptions available after obtaining One Person Company Registration:
- Sign on Annual Returns
- Hold Annual General Meetings (AGM) and Board Meetings (BM).
- Sign on the Company’s Financial Statements.
- Option to give out with the requirement of conducting an AGM
- Authority of the Tribunal to call meetings of its members.
- Calling of EGM (Extraordinary General Meeting).
- Notice of the meeting.
- Statement to be affixed with the notice.
- A quorum for meetings.
- Chairman of meetings.
- Limitation on voting rights.
- Voting by the showing of hands.
- Voting by electronic means.
- Demand for poll.
- Postal vote.
- Distribution of the members’ resolution
MANDATORY ANNUAL COMPLIANCES REGARDING OPC
Listed below are the mandatory annual compliances for One Person Company:
- As per the Companies Act 2013, in OPC, a Minimum of 2 Board Meetings are required.
- Statutory Audit by authorized Chartered Accountant.
- Appoint an Auditor
- ITR (Income Tax Return) filing
- Annual filings to the ROC (Registrar of Companies)
- Maintaining Statutory Registers and Minutes
- Form AOC-4 for the financial statement
- MGT-7 for an annual return
FAQs on One Person Company Registration
- DSC (Digital Signature Certificate) application
- DIN (Director Identification Number) application
- Name Approval application
- Documents Required
- Filling required Form with the MCA (Ministry of Corporate Affairs)
- Certificate of Incorporation
Companies Act, 2013, defines the term “One Person Company” as a company that requires just one person as to its owner and shareholder. Moreover, members of this business structure are nothing but contributors to its MOA (Memorandum of Association), or its shareholders. Hence, an OPC (One Person Company) effectively a business structure or a company with only one shareholder as its member.
Yes, according to the Companies Act, 2013, a company can be established by just one Director and one member. Besides, OPC is a type of company where the agreement requirements are comparatively lesser than that of a Private Limited Company.
|Point of Difference||One Person Company||Sole Proprietorship|
|Obtaining Registration||Is mandatorily registered to get itself registered under the Companies Act, 2013||Not Compulsory in this business model|
|Legal status of the entity||Separate legal entity||Not recognized as a separate legal entity|
|Members liability||Limited up to the extent of the share capital||Unlimited liability|
|Minimum number of members required||A Minimum of one person is required||A Sole Proprietorship does not require members|
|Maximum number of members required||Maximum two persons||Maximum one person|
|Transferability||Allowed to one person only||Not allowed in the case of Sole Proprietorship|
|Survival||Existence will not come to an end as the nominee will become the owner of the said company||Existence of the sole proprietorship comes to an end on the death or retirement of the owner|
|Taxation||The Tax rate is 30 percent on the profits plus cess and surcharge.||Taxed as an individual|
|Annual filings||Filed with the (ROC) registrar of the company.||Income tax returns (ITR) with the registrar of the company.|
Only a residential citizen of India is qualified to form a One Person Company in India. The same condition applies to the nominees of One Person Company.
Listed below are the requirements for converting a private company to a One Person Company:
- The company must not have a total paid-up capital above Rs 50 Lacs.
- The Average Annual Turnover of the previous three years should be less than Rs 2 Crore. Moreover, if the company is newly formed and has not completed the period of three years, the company's turnovers will be calculated from its incorporation.
- There should be only 1 shareholder of the Company, that, too, an individual having an Indian nationality.
- Besides, the shareholder must be a resident person. A person is considered an Indian Resident if he or she stays in India for 180 days during the immediately preceding financial year.
- Lastly, a minor cannot be considered as a member or nominee of a One Person Company.
The given below are the benefits affixed to the concept of One Person Company:
- Separate Legal Entity
- Minimal Requirements
- Single Owner
- Limited Liability
- Easy Funding
- Benefits under Income Tax Law
- More Opportunities
- Receive Interest on any Late Payment
- Benefits of being an SSI (Small Scale Industries)
- Increased Trust and Prestige
- Credit Rating
Yes, an One Person Company can increase funds through angel investors, financial institutions, venture capital, etc.
An OPC is mandated under the Companies' Act 2013 to compulsorily convert into the Private Company when its Paid-Up capital increases above 50 lacs or turnover are above 20 crores. The conversion must be done within 6 months.
No, a foreigner cannot be appointed as a nominee in a One Person Company. The name of the person nominated will be mentioned in Form No INC-2, along with the consent of such nominee obtained in Form No INC-3 is to be filled.
Yes, the Affidavit in Form INC-9 is required to be filed by the subscriber of the Memorandum.
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