Introduction to a One Person Company
Conversely, the concept of the one-person company was brought to India by the Companies Act, 2013 to assist the entrepreneurs. They are the people who are capable enough to start a venture allowing them to create a single person economic entity.
Advantages of having an OPC
Following are the advantages of a One Person Company:
- You can have more than 1 directors but shareholders cannot be more than 1
- Member’s death doesn’t affect the OPC
- OPC is effortless to set up and maintain
- Members have restricted Liability Under OPC liability
- Registration and incorporation of OPC requires less paperwork
- OPC enjoys no interference from third parties.
Eligibility criteria for the incorporation of OPC
- The entrepreneur desirous of incorporating an OPC must be a citizen of India and resident in India.
- Legal entities like LLP and company cannot be an OPC.
- Promotor selects a nominee during the incorporation process
- The minimum authorized capital must be Rs 1 Lakh.
- Minors, foreign citizens, any person incapacitated by contract cannot be members of an OPC
- If the paid-up capital is more than Rs 50 lakhs or if the turnover is above 2 crores OPC cannot exist.
- The OPC must have at least 1 shareholder/Nominee/Directors.
Documents required for registration of OPC
Below are the documents necessary for the registration of an OPC, the director of the one-person company has to submit these documents:
- PAN card or scanned copy of passport in case of foreign nationals and NRI
- Scanned copy of passport, voter ID or driving license.
- Copy of current bank account, phone or mobile bill, electricity or gas bill.
- Passport size photographs
- Signature or thumb impression
- Memorandum of Association
- Articles of Association
- Affidavit and consent of the proposed director
Moreover, self-attest the above documents. NRI and a foreign national have to compulsorily notarize their documents.
Authority for registration of OPC
The RoC (Registrar of Companies) is the appropriate authority for registering the OPC.
Fees required for registration of OPC
In general, the government’s fee for the registration of an OPC and a small company are as follows:
|Nominal share capital limited to Rs. 10,00,000||Rs 2000|
|Nominal share capital between Rs. 10,00,000 to Rs 50,00,000||Rs 2000; Rs 200 added for every 10,000 or part thereof of nominal share capital.|
|Nominal share capital between Rs. 50,00,000 to Rs 1 crore||Rs 1,56,000. Rs 100 added for every Rs. 10,000 or part thereof of nominal share capital|
|Nominal share capital amounts to Rs 1 crore and above||Rs 2,06,000. Rs 75 added for every Rs. 10,000 or part thereof of nominal share capital to a maximum of Rs 250 crore.|
Please note: The fees for companies without share capital is fixed to Rs. 200 irrespective of their turnover.
Procedure for registration of OPC
Thereby, the process for registration of OPC is as follows:
- Digital Signature Certificate (DSC): The first step is to obtain a DSC, the director would require documents for address proof (Aadhar Card, Pan Card etc.). It is mandatory for digital company registrations.
- Director Identification Number (DIN): The director has to fill the SPICe form to avail DIN. Director’s name and address proof have to be submitted. Form DIR-3 is filled for an existing company.
- Name approval application: Moreover, the name for company registration can be approved either through the RUN web service of MCA (Ministry of Corporate Affairs) or Form SPICe32. Submitting a preferred name with signature. The ministry will decide to approve that name. The company’s name once approved shall affix Private Limited at the end for example XYZ (OPC) PVT. LTD.
- Filling the forms with MCA: To complete the OPC registration, the above-mentioned documents will have to be attached with the SPICe form, SPICe-MoA and SPICe-AoA along with DSC
Issuing of incorporation certificate
Once the uploaded documents are verified the RoC (REGISTRAR OF COMPANIES) issues ‘Certificate of Incorporation’. Hence, the business shall commence.
Compliances Post OPC Registration
Consequently, post OPC registration there are certain compliances which are as follows:
- A minimum 1 board meeting every 6 months. The time gap between meetings shouldn’t be less than 90 days.
- Also, properly mention the books of accounts
- Likewise, timely completion of Statutory audit of financial statements
- Thereby, income tax returns have to be filed every 30th September
- Similarly, Financial statements in Form AoC-4 and RoC annual return in Form MGT7 have to be filed.
To summarize, we hope all the important details about the formation of a One Person Company or OPC in India were covered and we believe it will be helpful in setting up your company conveniently.