One Person Company Registration Services
Looking to register a One Person Company? Check out the guide below to learn about the process, and discover how we can assist you in setting it up effortlessly.
A one person company (OPC) is a business structure that is suitable for solopreneurs who want to run their business under a single head. OPCs are registered under the Companies Act, 2013, and allow an individual to obtain the benefits of limited liability and a separate legal entity that is normally found in corporations.
When it comes to one-person company formation, an individual can establish and manage a company single-handedly, acting as a director and shareholder. And this can give your business several benefits, including a clear distinction between your personal and business finances, and protecting your personal assets in case of any liability. Also, the perpetual succession feature allows you to continue your company's operations in the event of any untoward incident.
Let's explore the advantages of starting a One Person or One Man Company and look at the process involved, including how to register an OPC. Additionally, our team of experts can guide you through OPC incorporation rules and legal formalities. From drafting your Memorandum and Articles of Association to securing your Digital Signature Certificate (DSC) and Director Identification Number (DIN), we ensure that your OPC registration is smooth.
Advantages of One Person Company
A one-person company offers many advantages beyond the obvious benefits. These advantages can significantly impact your business, helping you improve your entrepreneurial journey.
Simplified compliance requirements
Compared to traditional companies, OPCs have reduced regulatory requirements, leading to fewer filings and less administrative overhead.
Perpetual succession
OPCs offer a clear mechanism for succession planning. By nominating a nominee director, you ensure the continuity of your business even in unforeseen circumstances.
Tax planning opportunities
As separate legal entities, OPCs can deduct business expenses, maximise depreciation on assets, and potentially benefit from lower tax rates applicable to specific income brackets.
Seed funding options
The structured nature of an one man company enhances its appeal to angel investors and venture capitalists seeking early-stage investment opportunities.
Increased Credibility with Clients and Partners
Operating as an OPC provides a formal structure that increase the credibility in the eyes of your clients, suppliers, and potential partners.
Limited Liability Protection
Different from sole proprietorships where the business owner is personally liable for debts, an OPC grants limited liability protection.
Our Services
Forming a One Person Company (OPC) can bring in a lot of benefits for solo entrepreneurs, freelancers, consultants, small business owners and indviduals with low investment needs, or people who want simplified compliance.
The benefits include limited liability and a separate legal identity. Here is a list of services on how we simplify OPC registration for you.
- We help you obtain a secure Digital Signature Certificate, to facilitate electronic document signing.
- We assist you in acquiring Director Identification Number (DIN), which is mandatory for company incorporation.
- We help you in reserving an unique company name and apply for its reservation through the Ministry of Corporate Affairs (MCA) portal.
- We draft your Memorandum and Articles of Association, outlining the company's objectives.
- We handle the submission of the SPICe+ (INC-32) form, and other required documents to the MCA for incorporation.
- Upon approval, we facilitate the issuance of the Certificate of Incorporation.
- At the same time, we help you in applying for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
How can Benchmark help you!
At Benchmark, we understand the complexities of OPC registration. We offer a comprehensive set of services - from start to successful OPC registration. Our team has in-depth knowledge of the Companies Act, 2013, and its implications for OPCs. We handle every step, from obtaining your DSC and DIN to drafting your Memorandum and Articles of Association and filing your application with the Ministry of Corporate Affairs.
Minimum Requirements to Register an OPC in India
These requirements ensure that the OPC structure is utilised appropriately and that the individual establishing the company meets the necessary criteria.
| Requirement | Details |
|---|---|
| Promoter | Must be a natural person (an individual, not a company or other legal entity) |
| Citizenship | Must be an Indian citizen |
| Residency | Must be a resident in India, having stayed in India for at least 182 days in the preceding financial year |
| Number of Members | Only one member is allowed, who is also the sole director |
| Nominee | Must appoint a nominee to take over the company in case of the member's death or incapacity |
| Minimum Authorised Capital | The minimum authorised capital for an OPC is INR 1 lakh |
| Registered Office | Must have a registered office address in India |
| Unique Name | The proposed company name must be unique and comply with naming guidelines |
| Digital Signature Certificate (DSC) | The proposed director must obtain a DSC for e-filing documents |
| Director Identification Number (DIN) | The proposed director must obtain a DIN |
Documents Required for Registration
Successfully registering a One Person Company (OPC) requires preparation and submission of various documents. These documents serve as evidence of compliance with legal requirements and provide essential information about the company and its promoter.
Promoter's Documents
- Proof of Identity: PAN Card, Aadhaar Card, Passport, Voter ID, or Driving Licence
- Proof of Residence: Aadhaar Card, Passport, Bank Statement, Utility Bill, or Rental Agreement (not older than 2 months)
- Passport-sized photograph
Registered Office Documents
- Proof of Ownership: If owned premises, provide Sale Deed/Property Tax Receipt/Registry Extract
- Proof of Occupancy: If rented premises, provide a No-Objection Certificate (NOC) from the owner along with a Rental Agreement/Lease Deed
Company-Related Documents
- Memorandum of Association (MoA): Defines the company's objectives and powers
- Articles of Association (AoA): Lays out the company's internal rules and regulations
- Declaration and Affidavit: Stating compliance with all legal requirements
- Consent Letter from Nominee: Appointing a nominee to take over in case of incapacity or death
- Proof of Nominee's Identity and Address: PAN Card, Aadhaar Card, or other valid documents
Forms
- SPICe+ (Simplified Proforma for Incorporating a Company Electronically Plus)
- AGILE-PRO (Application for Goods and Services Tax Identification Number – Professional)
- e-MoA (Electronic Memorandum of Association)
- e-AoA (Electronic Articles of Association)
- INC-3 (Declaration of Compliance)
OPC Registration Process in India
Here is the step-by-step process to register your one-person company in India.
Step 1: Obtain a Digital Signature Certificate (DSC)
The first step involves acquiring a DSC for the proposed director. This digital equivalent of a physical signature is essential for e-filing documents with the Ministry of Corporate Affairs (MCA).
Step 2: Apply for Director Identification Number (DIN)
The proposed director needs to obtain a unique DIN. This identification number is mandatory for anyone intending to serve as a director in any Indian company.
Step 3: Name Approval Application
Choosing a unique and appropriate name for your OPC is crucial. An application for name reservation is filed with the MCA using the RUN (Reserve Unique Name) service.
Step 4: Drafting of MOA and AOA
The Memorandum of Association (MOA) and Articles of Association (AOA) lay the foundation for your OPC. These documents outline the company's objectives, scope of activities, and internal governance rules.
Step 5: Filing of SPICe+ (INC-32)
Once the name is approved, and the MOA & AOA are drafted, the next step is to file the Simplified Proforma for Incorporating a Company Electronically (SPICe+) form along with the necessary attachments. This single application combines various forms previously required for company incorporation, simplifying the process.
Step 6: Issuance of Certificate of Incorporation (COI)
Upon successful verification of the submitted documents and compliance with all requirements, the MCA issues the Certificate of Incorporation, marking the official formation of your OPC.
Additional Steps
Depending on specific circumstances, additional steps may be involved:
- PAN & TAN Application: Post incorporation, apply for a Permanent Account Number (PAN) and Tax Account Number (TAN) with the Income Tax Department.
- Bank Account Opening: Open a current bank account in the name of the OPC to facilitate financial transactions.
- GST Registration: If applicable, register for Goods and Services Tax (GST).
Challenges Faced by One Person Companies
While One Person Companies (OPCs) offer many advantages, it is important to be aware of certain challenges that may arise during its operation. Here are a few challenges faced by OPCs:
- OPCs may face challenges securing significant funding from traditional financial institutions compared to larger corporations.
- Some clients or partners might perceive OPCs as less established compared to larger companies, impacting business development opportunities.
- While the perpetual succession feature offers continuity, the sole ownership structure of OPCs can complicate succession planning.
- Although OPCs enjoy relaxed compliance norms compared to traditional companies, adhering to even simplified regulations demands diligence and attention to detail.
- While single-member company registration offer a strong starting point, their inherent structure can pose limitations on scalability.
Checklist for OPC Formation
Here is a comprehensive checklist including both statutory requirements and practical considerations to streamline your OPC registration process:
- Confirm that only one individual will be the shareholder and director of the OPC.
- Designate a nominee using Form INC-3 before incorporation.
- Secure written consent from the nominee, acknowledging their role and responsibilities.
- Ensure the chosen name for your OPC is distinct and adheres to the Companies (Incorporation Rules) 2014 guidelines.
- Verify that the OPC has a minimum authorised share capital of ₹1 Lakh.
- Procure a valid DSC for the proposed director to enable secure electronic filing of documents.
- Post-incorporation, apply for a Permanent Account Number (PAN) and Tax Account Number (TAN) for the OPC.
Sole Proprietorship Vs One Person Company
Choosing the right business structure is a critical decision for any entrepreneur. Both OPC and Sole Proprietorship have their own benefits and limitations. But the right choice depends on your goals, liability concerns, and long-term plans. Below is a simple comparison table to help you decide.
| Feature | Sole Proprietorship | One Person Company |
|---|---|---|
| Legal Status | No separate legal entity; the business and owner are considered one | A separate legal entity, distinct from the owner |
| Liability | Unlimited liability; the owner's personal assets are at risk in case of business debts or legal claims | Limited liability; the owner's liability is restricted to their investment in the company |
| Ownership & Control | Sole ownership and control by a single individual | Sole ownership and control by a single individual |
| Compliance Requirements | Minimal compliance requirements; no mandatory filings or audits | Must comply with company law provisions, including annual filings and audits |
| Perpetual Succession | No perpetual succession; the business ceases to exist upon the owner's death or incapacitation | Perpetual succession; the company continues to exist even after the owner's demise |
| Fundraising | Limited access to formal funding sources | Improved access to funding from banks and financial institutions |
| Taxation | Taxed as individual income | Taxed as a separate entity, potentially benefiting from lower corporate tax rates |
| Conversion | Cannot be converted to another business structure | Can be converted to a private limited company upon meeting specific criteria |
Conclusion
From obtaining the necessary Digital Signature Certificate (DSC) and Director Identification Number (DIN) to drafting the Memorandum and Articles of Association and filing the SPICe+ form, the OPC registration process demands attention to detail. However, with the expert guidance of a Chartered Accountant, the journey can be seamless and efficient.
Get in Touch
Don't let legal complexities hold you back. Contact us today to start your OPC registration journey and turn your entrepreneurial dreams into success.
FAQs
Can a foreign national incorporate a One Person Company in India?
No, only an Indian citizen and resident can be a member and director of an OPC in India.
What happens if the paid-up share capital of an OPC exceeds Rs. 50 lakhs or its average annual turnover during the relevant period exceeds Rs. 2 crores?
In such a scenario, the OPC must convert into a private limited company or public limited company within six months of exceeding the threshold.
Can an OPC be converted into a Limited Liability Partnership (LLP)?
Yes, an OPC can be converted into an LLP by complying with the relevant provisions of the Companies Act, 2013, and the Limited Liability Partnership Act, 2008.
What are the consequences of non-compliance with the annual filing requirements for an OPC?
Non-compliance can lead to penalties, and in extreme cases, the company may be struck off from the register of companies.
Can a minor be a nominee in an OPC?
Yes, a minor can be nominated, but upon attaining majority, they must give their consent in writing to continue as a nominee within six months.