One Person Company (OPC) Registration in India - Overview

• Only One Person is required: As the name says only one person can be the shareholder or nominee of the company.
• Resident Director: One director must be a resident of India meaning that he/she has stayed at least for 182 days in the previous financial year and only an Indian resident and citizen can be the shareholder and nominee.
• Capital Requirement: There is no minimum capital required for commencement of business.
• Unique Name of Company: The proposed name of the company should be unique implying that it should not match with the names of other existing company or LLP.
• DSC and DIN: Director Identification Number and Digital Signature Certificate is required
• Signing on annual returns.

1. Documents from Director / Shareholder / Nominee

• Identity Proof: PAN Card/ Aadhar Card/ Passport/ Driving License/ Voter Identity Card
• Address Proof : Any utility bill (telephone/mobile/electricity/bank account statement) not older than 2 months
• Passport size Photographs

Documents to be Signed by all Director(s)

• Consent to Act as Director: Form DIR-2
• Details for DIN

Address of Registered Office

• NOC from the Owner of property to use it as the Registered Office of the Company.
• Copy of Rent Agreement (in case rented)
• Documents of Property ( if owned)
• Address Proof - Any utility bill like Electric Bill (not older than 1 month)

Let us have a look at the steps for One Person Company Registration Process.

Step 1: Apply for DSC

First apply for DSC for which following documents will be required: Address proof

• Aadhar card
• PAN card
• Photo
• Email Id
• Phone number

Step 2: Apply for DIN

Once the Digital Signature Certificate (DSC) is obtained, apply for the Director Identification Number (DIN) of the proposed Director in SPICe Form along with the name and the address proof of the director.

Step 3: Name Approval Application

The next step is to finalise the name of the Company which will be in the form of "ABC (OPC) Private Limited".

The name has to be filed in the Form SPICe+ 32 application. Only one preferred name along with the significance of proposing that name can be given in the Form SPICe+ 32 application. If the name gets rejected, another name can be submitted by applying another Form SPICe+ 32 application. Then the name has to get approved by the MCA.

Step 4: Documents Required

Following documents have to be prepared that will be submitted to Registrar of Companies.

• The Memorandum of Association (MoA) which specifies the objectives for which the company is being formed.
• The Articles of the Association (AoA) lays down the rules and regulations that the company will follow.
• Since there are only 1 Director and a member, a nominee on behalf of such a person has to be appointed because in case he becomes incapable or dies and cannot perform his duties the nominee will perform on behalf of the director and inherit his business. His consent in Form INC – 3 has to be submitted along with his PAN card and Aadhar Card.
• Proof of the Registered Office along with the proof of ownership and a NOC from the owner.
• Declaration and Consent of the proposed Director of Form INC -9 and DIR – 2 respectively.
• A declaration by a recognised professional certifying that all compliances have been successfully made.

Step 5: Filing of Forms With MCA

All these documents will be attached to the SPICe Form, SPICe-MOA and SPICe-AOA along with the DSC of the Director and the professional, and will be submitted to the MCA for approval. The PAN and TAN is generated automatically at the time of incorporation of the Company.

Step 6: Issue of Certificate of Incorporation

Upon verification and approval, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and you can commence your business.

Independent Existence
One Person Company enjoys a separate legal entity. As per law, it enjoys the existence of a person that has a common seal, and perpetual succession. It has the authority to exercise all functions of an incorporated person.

Separate Property
OPC has only one shareholder and there is no option of transferring the share because if the share is transferred, the company will lose its identity as a one person company. All the shares of the company are also transferred as then the entire structure and ownership of the company will change. There is no clear guidance or clause that can explain the transfer of shares.

Tax Flexibility and Savings
OPC makes a valid contract with its shareholders or directors. Director’s remuneration, rent, and interest are deductible expenses and this reduces the profitability of the Company, thereby the taxable income of the business is reduced.

Complete Control of the Company with the Single Owner
OPC is managed by a single owner thus there is limited confusion and quick decision-making. Importantly, when there is a sense of ownership thus the business is handled in a better way.

Legal Status and Social Recognition for Your Business
OPC is the most popular form of business and most large organizations prefer to deal with private limited companies rather than proprietorship firms. OPC enjoys a corporate status in society and hires the desired workforce. The workforce can be assigned good positions and thus are interested in the work and give good performance.

Received Interest Rate on Any Late Payment
OPC enjoys several benefits under Enterprises Development Act, 2006 as newly incorporated OPC is a Micro, Small, or Medium as covered under the act. Under the law, if the buyer or seller receives any late payment then they are entitled to receive an interest rate, which is three times the rate of the bank.

Suitable for Small Businesses
If the paid up capital of an OPC exceeds Rs.50 lacs and its annual turnover exceeds Rs.2 crores, then the OPC needs to convert into a private limited company. Hence, while small businesses can benefit from it, the concept is not suitable for the larger ones.

Restrictions on Business Activities
An OPC cannot be incorporated under Section 8 of the Companies Act 2013. OPCs cannot carry out non-banking financial investment activities.

Taxation
As OPC is deemed as a separate entity under the Income Tax Act, 1961, the tax norms for a private limited company apply to an OPC too. This indicates higher tax rate which is a disadvantage for any company.

Chances of an Unsuccessful Perpetual Succession
In an OPC, the nominee takes charge of the business if the sole member becomes incapable of entering into a legal contract. As the nominee does not take part in the daily operations of the business, there’s a high probability that the perpetual succession might not be as successful.

More Expensive to Start as Compared to Sole Proprietorships
A person willing to start a business alone usually chooses between a sole proprietorship or OPC as both this type allows a single person to start the venture. However, the cost of registering an OPC and its mandatory compliances are much higher than a sole proprietorship.

OPC and Sole Proprietorship sound similar and both involve a single member for establishing a business. OPC and Sole Proprietorship are different in terms of laws and legislations and its activities. OPC is considered as a Private Company having separate legal entity and limited liability. A Sole Proprietorship on the other hand is not a legal entity. Costs are minimal to start this kind of business. Tax returns are signed under the name of the member. They have flexible working hours. They don’t hold annual general meeting or board meeting. Income and losses are taxed on the individual’s personal income tax return. It simply refers to an individual who owns the business and is personally responsible for the debts of the business.

Let's have a glance at the differences between OPC and Sole Proprietorship.

The DSC and DIN of the shareholders and directors can be obtained in 1 day. The Certificate of Incorporation of an OPC is obtained in 3-5 days. The whole incorporation process of an OPC takes approximately 10 to 15 days, subject to approval from respective departments and reverts from the respective departments.

OPC Registration fees can range from Rs. 7,500 to Rs. 20,000.

Tax Seva Kendra is one of the best online OPC consultant in India to help register OPCs in India. We have several years of experience in the application of OPC registration. Tax Seva Kendra has 200+ regional offices in India and expands its network continuously. You can avail our free consultancy service as well. We are time oriented and have complete transparency in our operations.

One Person Company registration or incorporation is the subject of involving a legal process which should be handled by a professional tax consultant. As per the Indian act, a Public Limited Company has a separate legal identity from its owners. A private limited company has no right to raise capital from public or issue shares for public subscription. The registration of Public Limited Company is complicated compared to proprietorship and partnership firm. Tax Seva Kendra offers online incorporation service of One Person Company for Indian citizen at a much affordable price.