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At Taxhint Advisors We Offer's One Person Company Registration

We offer specialized consultancy services for forming and managing One Person Companies (OPC), including company registration, GST registration, ITR filing, and FSSAI certification. Our expertise ensures smooth and hassle-free legal compliance, allowing you to focus on growing your business with confidence.

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One-Person Company (OPC) Registration

One-Person Companies (OPCs) are preferred by business owners who want to have minimal liability and a unique legal identity. An OPC is a special kind of business structure that allows one individual to operate as a corporation and enjoy all the advantages of limited liability with total control. A person can function as both a director and a shareholder in an OPC, combining the benefits of a sole proprietorship with the legal security of a private limited company.

Our speciality at TaxHint is streamlining the One Person Company registration procedure so that business owners may easily handle the intricate legal requirements for affordable one-person company registration costs. Our knowledgeable staff is committed to helping you at every stage, from document preparation to filing. We provide professional advice to enable you to make well-informed decisions about registering as a one person company.

The Companies Act of 2013 established the idea of One Person Company (OPC) registration in India, allowing one person to form a business and benefit from both a standard company structure and a sole proprietorship. With the 2013 passage of the Companies Act, this idea became accessible.

Eligibility Criteria

 

Prior to proceeding with the OPC registration process, it is imperative that you comprehend the particular eligibility requirements and constraints that dictate its establishment. To guarantee that the person advertising the OPC is qualified to do so, certain conditions are outlined in the Companies Act.

Natural Person and Indian Citizen

An One-Person Company (OPC) can only be established by a natural person who is a citizen of India. It is important to note that only individual Indian citizens are eligible to form an OPC. Companies, corporate entities, and other legal bodies are not permitted to register as OPCs, ensuring that this structure is specifically designed for entrepreneurs seeking sole ownership with limited liability.

Resident in India

The promoter of an One-Person Company (OPC) must be a resident of India. This means that the individual must have spent a minimum of 182 days in India during the preceding calendar year. This residency requirement ensures that the promoter has a strong connection to the country and is actively engaged in the business environment.

Minimum Authorized Capital

The OPC must have a minimum authorized capital of Rs 1 00,000, the amount stated in the company's capital clause during the OPC Company registration.

Nominee Appointment

At the time of incorporating an One-Person Company (OPC), the promoter must designate a nominee. In the unfortunate event of the promoter’s death or incapacity, this nominee would assume the role of the sole member of the OPC, ensuring continuity of the business. The nominee serves as a safeguard, providing stability and security for the company’s future.

Restrictions on Certain Businesses

Businesses involved in financial activities such as banking, insurance, or investments are not eligible for OPC company registration.

Conversion to Private Limited Company

To meet the regulatory criteria for larger enterprises, the OPC must convert into a private limited company if its average annual turnover exceeds 2 crores or its paid-up share capital exceeds 50 lakhs.

Advantages of One Person Company (OPC)

Legal Status

An OPC is protected from personal accountability for company losses by obtaining separate legal entity status. This allows the founder to remain free from liability.

Efficient Management

With an One-Person Company (OPC), the business is managed by a single individual, enabling swift decision-making and seamless execution. This streamlined approach ensures that there are no delays or conflicts, allowing for efficient management and faster adaptation to market changes.

Perpetual Succession

One-Person Companies (OPCs) offer the advantage of perpetual succession, ensuring the continuity of the business even if the sole member is no longer able to manage it. This means the OPC can continue its operations unaffected by changes in ownership or the death or incapacity of the member, providing long-term stability for the company.

Reduced Compliance

Under the Companies Act of 2013, OPCs are free from certain compliance standards, which simplifies administrative tasks.

Easy Fundraising

Unlike proprietorship businesses, One-Person Companies (OPCs) have a distinct advantage when it comes to raising funds. As private companies, OPCs find it easier to secure financing from banks, angel investors, and venture capitalists. The corporate structure of an OPC offers greater credibility and trust, making it an attractive option for investors looking to support scalable and structured ventures.

Simple Incorporation

An One-Person Company (OPC) can be formed with just one member and one nominee. The member holds both the role of the director and the sole shareholder, providing a simple and streamlined structure. Additionally, OPCs benefit from a hassle-free incorporation process, with no minimum paid-up capital requirement, making it an accessible option for entrepreneurs.

Disadvantages of One Person Company

Suitable for Small Businesses

OPCs can only have one member, hence they are best suited for small-scale enterprises. This restricts their capacity to raise more money as their company grows.

Restriction on Business Activities

OPCs are prohibited from participating in specific activities, including philanthropic endeavours and non-banking financial ventures. Therefore, businesses engaging in these kinds of activities are not qualified to register as OPC corporations.

Ownership and Management

In OPCs, the director might also be the lone member, making it difficult to distinguish between ownership and management. Potential conflicts of interest or ethical issues may result from this.

SEC Online Registration for One Person Corporation (OPC)

SEC (Securities and Exchange Commission) Online Registration for a One Person Corporation (OPC) is a digital process that allows a single individual to register a corporation through the SEC eSPARC portal. An OPC is a type of business entity that has only one shareholder who acts as both the owner and director.

Key Features of SEC Online OPC Registration

  1. Single Ownership – Only one person is required to form the corporation.
  2. Limited Liability – The owner’s liability is limited to the invested capital.
  3. Legal Entity – The corporation exists separately from the owner.
  4. No Minimum Capital Requirement – Except for specific industries that require minimum capital.
  5. Nominee and Alternate Nominee – Required to ensure business continuity in case of incapacity or death of the owner.

Process of SEC Online OPC Registration

  1. Name Reservation – Check and reserve the company name using the SEC eSPARC portal.
  2. Application Submission – Complete the OPC registration form on eSPARC and provide business details.
  3. Document Upload – Submit required documents such as Articles of Incorporation, Nominee Forms, and Valid ID.
  4. Payment of Fees – Pay the registration fees online via GCash, Landbank, or over-the-counter banking.
  5. SEC Approval – The SEC reviews and approves the application.
  6. Certificate Issuance – Once approved, the Certificate of Incorporation is issued online.
  7. Post-Registration Compliance – Secure a TIN from BIR, local business permits, and register books of accounts.

One Person Company (OPC) Registration Process

Prior to proceeding with the OPC registration process, it is imperative that you comprehend the particular eligibility requirements and constraints that dictate its establishment. To guarantee that the person advertising the OPC is qualified to do so, certain conditions are outlined in the Companies Act.

Step 1: Apply for DSC

The first step is to obtain the Digital Signature Certificate (DSC) of the proposed director which requires the following documents:

  • Address proof
  • Aadhaar card
  • PAN card
  • Photo
  • Email Id
  • Phone number

Step 2: Apply for DIN

The proposed director must next apply for the Director Identification Number (DIN) in SPICe+ form along with verification of their identity and residence after obtaining their Digital Signature Certificate (DSC). Only companies that already exist can choose to use Form DIR-3. That indicates the applicant will not need to file Form DIR-3 separately as of January 2018. Up to three directors can now apply for DIN within the SPICe+ form.

Step 3: Name Approval Application

  • Choosing a name for the company is the next step in the incorporation process of an OPC. The company will be known by the name ABC (OPC) Private Limited.
  • In the Form SPICe+ application, the name may be authorised. In the Form SPICe+ application, only one preferred name and the rationale for retaining that name may be provided. If the name is refused, another Form SPICe+ application can be made with a different name.
  • We proceed to the following stage after the MCA approves the name.

Step 4: Documents Required

We have to prepare the following documents which are required to be submitted to the ROC:

  • The company’s objectives or the stated business for which it will be incorporated are stated in the Memorandum of Association (MoA).
  • The Articles of the Association (AoA) lays down the by-laws on which the company will operate.
  • Since there is only one director and one member, it is necessary to appoint a nominee on their behalf. This is because, in the event that the director becomes incompetent or passes away and is unable to carry out his obligations, the nominee will act in the director’s place. His PAN card and Aadhar card would be collected along with his agreement in Form INC – 3.
  • Evidence of ownership, a NOC from the owner, and the new company’s registered office.
  • Declaration and Consent of the proposed Director of Form INC -9 and DIR – 2 respectively.
  • 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 the 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. The Pan Number and TAN is generated automatically at the time of incorporation of the Company. There is no need to file separate applications for obtaining PAN Number and TAN.

Step 6: Issue of the Certificate of Incorporation

We can start our firm after receiving a Certificate of Incorporation from the Registrar of Companies (ROC) following verification.

  • Company Registration Application: You file the required documents and application to the ROC. This usually includes details about the company’s name, business objectives, registered office, directors, and shareholders.

  • Verification: The ROC verifies the documents and ensures compliance with all relevant legal and regulatory requirements.

  • Incorporation: Once everything is in order, the ROC issues the Certificate of Incorporation. This certificate includes important details like the company’s registration number (CIN) and the date of incorporation.

  • Commence Operations: After receiving the Certificate of Incorporation, you can start conducting business, open bank accounts in the company’s name, and proceed with any other required registrations (such as GST, licenses, etc.).

Frequently Asked Questions

Only an Indian citizen and a resident of India can form an OPC. A resident is someone who has stayed in India for at least 182 days during the preceding calendar year.

There is no minimum capital requirement specified under the Companies Act, 2013. However, the authorized capital should be mentioned while registering, and it can be a nominal amount like ₹1,00,000 or higher depending on the nature of the business.

No, an OPC can only be formed by an Indian citizen who is a resident of India. Foreigners or NRIs cannot form an OPC.

An OPC is taxed like a private limited company. The income is subject to corporate tax rates. The income tax rates are applicable as per the regular tax slabs for companies. However, OPCs do not qualify for the presumptive taxation scheme under Section 44AD available for sole proprietors.

OPCs are required to file their annual financial statements and annual returns with the ROC, just like private companies. However, unlike private companies, OPCs are not required to hold an Annual General Meeting (AGM) as long as the sole member is the same.

The main difference is that an OPC offers limited liability, whereas a sole proprietorship does not. An OPC is a separate legal entity from its owner, whereas in a sole proprietorship, the owner and the business are the same. OPCs also have continuity in case of the owner’s death, unlike a sole proprietorship.