One Person Company
In India, One person company (OPC) is one of the easiest forms of corporate entities to manage the business. OPC is a composite of Sole-Proprietorship and Corporate form of business. A new concept has been introduced in the Company’s Act 2013, about the One Person Company (OPC). In a Private Company, a minimum of 2 Directors and Members are required whereas in a Public Company, a minimum of 3 Directors and a minimum of 7 members. A single person could not incorporate a Company previously. But now as per Section 2(62) of the Company’s Act 2013, a company can be formed with just 1 Director and 1 member.
It is a form of a company where the compliance requirements are lesser than that of a private company. It has been provided with various concessions in compliance requirements under the Companies Act. It is a form of a company where the compliance requirements are lesser than a private company. One Person Company registration is very easy and cheap process.
One Person Company Registration opens up new business opportunities for sole proprietors and entrepreneurs who also wish to enjoy the advantages of limited liability, and a separate legal entity as well. OPC does away the hassles of finding the right partner for starting a business as the registered entity. It requires only one person who will act as a member, shareholder, and director.
Benefits of One Person Company
There were many benefits of One Person Company as follows
For the purpose of Annual filing and other compliance, One Person Company is treated as a Private Limited Company. However, it is exempted from much compliance. It does not have to hold AGM every year.
All the information relating to the one person company is made available in a public database. This feature makes it easy to authenticate the existence of the business that ultimately helps in improving business credibility.
The company keeps on existing in the eyes of law even in the case of death, insolvency, the bankruptcy of any of its member or shareholder. It continues as a legal person until it is legally dissolved.
A shareholder or the owner of a Company has a limited liability towards the company. His/her liability is limited up to the shares subscribed by him/her.
Separate Legal Entity
One Person Company enjoys the benefit of Separate Legal Identity which clearly states that assets and liabilities of the business are not the assets and liabilities of the Directors or shareholders.
No Minimum Capital
There is no minimum capital is required to form a One Person Company. It can be registered even with Rs.1,000 as total Authorized Share capital.
- Copy of Passport (Foreign Nationals & NRIs) or PAN Card or Aadhaar Card
- Copy of Passport, Voter’s ID or Driver’s License
- Copy of Current Bank Account Statement/Phone or Mobile Invoice/Electricity or Gas Invoice
- Passport size photo
- Rental Agreement in case of registered office is rented place
- No-objection Certificate from the concerned property landowner
- Property or Sale Deed (if the property is owned)
Note: Your office space which is registered needs to be a commercial area; however, it can be your house of residence as well
Process of Registration of One Person Company
Step 1: Apply for DSC
The first Step is to obtain the Digital Signature Certificate (DSC) of the proposed Director which required the following documents:
- Address Proof
- Aadhaar card
- PAN card
- Email Id
- Phone Number
Step 2: Apply for DIN
Once the Digital Signature Certificate (DSC) is made, the next step is to 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. Form DIR-3 is the option only available for existing companies. It means with effect from 2018, the applicant need not file Form DIR-3 separately. Now DIN can be applied within SPICe form.
Step 3: Name Approval Application
The next step is to decide on the name of the Company. The name of the Company will be in the form of “AAA (OPC) Private Limited”.
There are 2 options available for getting name approved by making application in Form SPICe 32 or by using RUN Web service of MCA by giving only 1 preferred name along with the significance of keeping that name. However, with effect from March 23, 2018, Ministry has decided to permit two proposed Names and one re-submission while reserving Unique Names (RUN Service) for the Companies. Once the name is approved by the MCA we move on to the next step.
Step 4: Documents Required
We have to prepare the following documents which are required to be submitted to the ROC:
- The Memorandum of Association (MoA) which are the objects to be followed by the Company or stating the business for which the company is going to be incorporated.
- The Articles of the Association (AoA) which lays down the by-laws on which the company will operate.
- Since there are only 1 Director and a member, a nominee on behalf of such person has to be appointed because in case he becomes incapacitated or dies and cannot perform his duties the nominee will perform on behalf of the director and take his place. His consent in Form INC – 3 will be taken along with his PAN card and Aadhaar Card.
- Proof of the Registered office of the proposed Company along with the proof of ownership and a NOC from the owner.
- Affidavit and Consent of the proposed Director of Form INC -9 and DIR – 2 resp.
- A declaration by the professional certifying that all compliances have been made.
Step 5: Filing of forms with MCA
All these documents will be attached to SPICe Form, SPICe-MOA and SPICe-AOA along with the DSC of the Director and the professional, and will be uploaded to the MCA site for approval.
After uploading, Form 49A and 49B will be generated for the PAN and TAN generation of the Company which have to be uploaded to MCA after affixing the DSC of the proposed Director.
Step 6: Issue of the certificate of Incorporation
On verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and we can commence our business.
What is included in this package?
- Digital Signature Certificate for 1 Director (If the shareholders are different from directors, then additional DSC is required for Shareholders)
- Directors Identification Number for 1 Director
- Choosing the Company Name (Guidance)
- Memorandum of Association and Articles of Association
- PAN Number
- TAN Number
- The registration process includes – Drafting the Memorandum & Articles of Association, RoC filing fees for an authorized capital, Government Stamp Duty, and Certificate of Incorporation.
- Name Approval Certificate
- GST Registration
- Current Account of the company (On Request)