One Person Company Registration

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An Overview of One Person Company Registration

An OPC is a business structure that enjoys the benefits of both forms of business, i.e., a sole proprietorship and a company. Thus, it eliminates the hassles of finding the right kind of co-partner/s for starting a business as a registered entity.

One Person Company is bringing the unstructured Proprietorship Business into the structured version of a private company. OPC is opening the path for sole proprietors and start-ups.

According to Section 3(1)(c) of the Companies Act, 2013, the OPC can be formed for any lawful purpose by an individual. Section 2(62) states that the “One Person Company is a company which has only one person as a member”.

One Person Company is conceded as a private company. It is a company with one director and one shareholder only. An individual can now avail the benefit of limited liability doing sole proprietorship. The One Person Company is an example of vital growth in the corporate sector of our country. 

Benefits of One Person Company Registration

OPC is a company that can be formed with one Director and a member. It provides better opportunities with minimal compliance.

  • Easy Incorporation
    Under One Person Company, a single person can start a business with very little compliance. For the incorporation of OPC, only one member and one nominee are required. No paid-up capital is required for its incorporation.  
  • Complete Control by the Individual
    Since it is a single-person company, so the complete control remains in the hand of one person only. The decision-making becomes easy and quick as there will be no conflicting opinions, so the running and management of the Company will be easy.
  • Easy Compliance and Tax Flexibility
    The Companies Act, 2013 provides limited or lesser compliance to One Person Company. Less compliance means less paper, and it also takes less time to carry out such lesser compliance. The OPC need not show the cash flow and avails the benefit of tax availability too. Only the Director has to account book and annual returns. 
  • Benefits for Small Scale Industries
    One Person Company avails the benefits provided to small-scale industries like easy funding, less compliance, loans at a lower interest rate, etc.
  • Ease in Funding
    The OPC can take its funds through financial institutions, capital ventures, and other investors. To bring up its funds from outside, the OPC can upgrade itself into a private company. 
  • Least requirements for registration
    In the process of registration of One Person Company, the requirements are very less in comparison to the registration of other types of companies. 
  • Greater credibility
    As OPC is owned by a single person so its accounts are audited annually, and thus it has greater credibility.
  • Significant growth
    The One Person Company is completely based on the sole ownership of the Company and a Centralised Management System that pushes the Company towards achieving significant growth and a bigger contribution to our country’s economy.  
  • Income tax benefits
    If your company is unique and has the potential to create larger employment opportunities, then you can register your OPC under the Start-up India scheme of the Government and take the Income Tax benefit for at least five years. 
  • Sole business ownership
    Sole ownership provides stability in business since there will be no possibility of conflict of interest among the shareholder group because only one member is running the whole business.
  • Increased transparency
    Another benefit of One Person Company is increased transparency while dealing with government authorities. The transparency can be seen on both ends, i.e., the Government and the applicant.  
  • Beneficial to sectors like MSME and SME
    OPC is beneficial to some specific sectors such as MSME and MSE. Businesses in rural areas are prevailing because of MSMEs and SMEs, so by OPC, these services can be enhanced. As one person company needs financial help from public sector undertakings and institutions, the limited liability can save the OPC from any debt. OPC incorporation can positively impact the reputation and growth of MSMEs and SMEs.

Features of One Person Company

  • Perpetual Succession
    Even if there is only one member still, the OPC has a feature of perpetual succession. After the death of the only member of the Company, the nominee will run the Company. 
  • Limited Liability and Separate Legal Entity from its Member
    In the case of One Person Company, the member has limited liability. Being a company, OPC has a separate legal existence from its member. The separate legal entity gives protection to its member as the liability is limited to his shares, and he is not liable for the loss of the Company. The creditors can sue only the Company and not the Director or member for Company’s debt. 
  • Nominee
    The name of another person, i.e., the nominee, will be added to the Memorandum of Association with his prior consent. This nominee would take the place of the proprietor after the sole proprietor’s death or his incapacity to form a contract. The written consent of this nominee will also be filed with the registrar of companies during incorporation of the OPC along with the Company’s AOA and MOA.  
  • Sole Director and shareholder
    In OPC, the only member will act as Director in the OPC so there is only one Director, and he is the only one to manage the Company, and there is no need for any form of independent or executive Director in this type of Company. Only one single member is needed in OPC; hence the shareholder will hold all the responsibilities.
  • Owner of the property
    Since the OPC hold an artificial person status, it holds all the property related to business such as machinery, land, factories, residential property, building, and other assets of the Company in his own name, and no person can claim over any of such property. OPC can acquire, alienate and own the property in its name. 

Eligibility Criteria for Registering One Person Company

One should fulfil the following eligibility criteria before registering as One Person Company: – 

  • A natural person who is a resident of India can form OPC in the preceding calendar year.
  • Only one member can form an OPC.
  • The name should be unique and should not be similar to any other existing company and trademark.
  • An individual cannot incorporate more than 1 OPC, or an individual cannot be the nominee of more than 1 OPC.
  • There must be a least one director.
  • In the case of OPC, the threshold limit of paid-up capital is Rs 50 lakh, and the Average Annual turnover is Rs 2crore in the immediately preceding financial year. However, as per the latest budget now, there is no restriction on paid up and turnover limit.
  • One Person Company must include in its name (OPC) Private Limited.
  • Prior condition to indicate the name of the other individual as a nominee. As in the event of the death of the subscriber, a nominee becomes a member of the One Person Company.

Documents Required for One Person Company Registration

The followings are the documents required for registration of One Person Company:

  • PAN card or passport
  • Passport, in case of NRIs and foreign nationals 
  • Scanned transcript of voter’s ID and driver’s license 
  • Latest gas or electricity invoice/ bank account statement/ mobile phone or landline invoice 
  • Specimen signature
  • Passport-size photographs

The documents must be self-attested. The paper works of NRIs must be notarized or apostilled. 

Other Documents required by Registered Office:

  • Scanned transcript of gas or electricity invoice/ bank account statement/ mobile phone or landline invoice
  • Scanned transcript of rent agreement
  • Scanned transcript of No-objection Certificate (NOC) from the owner of the land, in case the member owns the property, then scanned transcript of sale deed.

Procedure for Registering One Person Company

The applicant should follow the requisite steps for registration of One Person Company:

  • Step-1- To Get DSC
    For registration, it is required for the applicant to get a Digital Signature Certificate (DSC) issued by the Certifying Authority.
  • Step-2- To Get DIN
    Director Identification Number (DIN) is for the proposed Director. The DIN is applied in the SPICe+ Form along with the details of the Director.    
  • Step-3- Approval of Name
    The name of the Company will be in the form of XYZ (OPC) Private Limited.
    RUN service will be used to check the availability of names, and one name for the OPC can be applied through SPICe+ (INC 32).
  • Step-4- Incorporation of One Person Company
    Within twenty days from the date of approval of RUN, i.e., approval of name form SPICe+ shall be filed for incorporation of OPC. All the requisite documents shall be attached with the form SPICe+ and will be uploaded on the MCA portal. The PAN and TAN will automatically generate at the time of incorporation. 
  • Step-5- Obtaining a Certificate of Incorporation
    The Registrar of Companies will issue a COI, i.e Certificate of Incorporation if he finds the information along with the documents appropriate.

Restrictions on One Person Company

  • No minor shall become a member or nominee of the One Person Company.
  • No minor can hold a share with beneficial interest.
  • OPC cannot perform voluntary conversion before the completion of 2 years from the date of incorporation of OPC.
  • It cannot be incorporated or converted into a company under section 8 of the Act.
  • It cannot perform Non-Banking Financial Investment activities.

Dreamunicus Procedure for OPC Registration

It is advisable that an attorney with “Company Incorporation experience” must be appointed to overwhelm many of the potential pitfalls that creep around within OPC Registration and to understand the requirement in detail. Hence, to obtain our service for the given procedure:

  • Purchase a Plan for Expert Assistance
  • Add Queries Regarding OPC Registration
  • Provide Documents to Corpbiz Expert
  • Prepare Application for OPC Registration+ Complete all Admissibility Criteria for Preliminary Screening
  • Complete Procedural Actions
  • Get your OPC Registration done at your Door Step!

The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided and the payment is received.

Frequently Asked Questions (Faq)

One Person Company is a company with just one member. According to Section 3 of the Companies Act 2013, OPCs are also private limited companies; hence they must adhere to all the requirements of a private limited company.

Every natural person who is an Indian citizen, whether or not they reside in India, may form a One Person Company.

In essence, an OPC is a private limited company with a sole shareholder. Given that it is a private limited company, perpetual succession is possible. The sole member is needed to designate a candidate who will assume control in the event of their demise or incapacity

Yes. The appointment of a nominee by a member of an OPC is required.

No, No, a person cannot simultaneously represent himself as a member of more than one OPC.

A minor is not permitted to join an OPC, serve as its nominee, or possess shares of an OPC with a beneficial interest.

Conversion of an OPC to a public limited or private limited company has no threshold limit. In the Companies (Incorporation) Second Amendment Regulations, 2021, provisions relating to the minimum paid-up capital that justified a mandatory conversion of an OPC have been repealed.

  • OPC cannot engage in non-banking financial operations, such as investing in the securities of anybody corporate, and
  • OPC cannot be converted into a Section 8 companies.
  • An OPC is obliged to convene at least one Board meeting in each half of the year, with no more than 90 days passing between meetings.
  • E form AOC-4 must be submitted to ROC within 180 days of the fiscal year's end. The annual financial report (AOC 4) includes a balance sheet, P&L, and auditor’s report.
  • Form MGT 7A must be submitted to ROC within 60 days of the AGM date. (MGT 7A is an annual return that covers details of directors and shareholders).
  • File an income tax return by October 31 of the next fiscal year.
  • Tax audit report in Form 3CA-3CD if the turnover exceeds the allowable threshold specified by the Income Tax Act of 1961 on or before September 30 of the succeeding fiscal year.

No. It is not required for an OPC to hold an annual general meeting.

If no AGM is held, Form MGT 7A must be submitted 60 days after the estimated AGM due date. The calculated due date for the AGM is six months after the fiscal year's conclusion.

The Company Secretary or, in the absence of a Company Secretary, the Director of a Company shall sign the Annual Return of an OPC.

When the nominee of an OPC replaces the sole member of an OPC in the case of his demise or inability to enter into a contract, Form INC-4 is filed with the Registrar. With the prior written approval of the individual thus nominated in Form INC-3, such a form must be filed within 30 days of the change in membership.

By increasing the minimum number of members and directors to 2 or 7 members and 2 or 3 directors, as the case may be, and by maintaining the minimum paid-up share capital as per the requirements of the Act for such companies, including proper compliance with section 18 of the Act for such conversion, an OPC may be converted into a private or public company other than a company registered under section 8 of the Act. For the conversion of OPC into a private/public company, E-Form INC-6 must be submitted.

A Cash Flow Statement that is a component of an OPC's financial statement is not required to be prepared or disclosed.

The most striking distinction between the two is that an OPC member has limited liability, whereas a sole proprietorship requires unlimited liability of its members. An OPC has the status of a distinct legal entity, but a single proprietorship does not. In contrast to a single proprietorship, which dissolves upon the death or retirement of its members, an OPC exists indefinitely.

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Behind the word mountains, far from the countries Vokalia and Consonantia, there live the blind texts. Separated they live in Bookmarks grove right at the coast

Shams W.Pawel Founder & CEO of XpeedStudio

Behind the word mountains, far from the countries Vokalia and Consonantia, there live the blind texts. Separated they live in Bookmarks grove right at the coast

Shams W.Pawel Founder & CEO of XpeedStudio

Behind the word mountains, far from the countries Vokalia and Consonantia, there live the blind texts. Separated they live in Bookmarks grove right at the coast

Shams W.Pawel Founder & CEO of XpeedStudio

Behind the word mountains, far from the countries Vokalia and Consonantia, there live the blind texts. Separated they live in Bookmarks grove right at the coast

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