Benefits of One Person Company Registration

Simple Incorporation Process
Incorporating an OPC is straightforward and hassle-free. It requires just one member and one nominee, with the member often serving as the director. While the minimum authorized capital required is INR 1 Lakh, there is no minimum paid-up capital requirement, making it accessible for solo entrepreneurs.

Separate Legal Entity
An OPC is a fully functional separate legal entity, capable of conducting business within the legal and regulatory framework. This status protects the individual who incorporates the company by limiting their personal liability.

Limited Liability
Since the OPC is independent of its member, the shareholder’s liability is limited to the shares held in the company. The single member is not personally responsible for the losses incurred by the OPC, providing a safeguard against personal financial risk.

Perpetual Succession
Despite having a sole shareholder, the OPC enjoys perpetual succession. At incorporation, the member appoints a nominee who will take over the company’s management in case of the member’s death or incapacitation, ensuring business continuity.

Fund Raising Made Easy
Being a recognized private company, OPCs have the advantage of raising funds from various sources such as venture capitalists, angel investors, and incubators. Banks and financial institutions also prefer lending to companies over sole proprietorships, making it easier for OPCs to access finance.

Fewer Compliance Requirements
OPCs benefit from simplified compliance under the Companies Act, 2013. They are exempt from submitting cash flow statements and do not require the company secretary’s signature on books of accounts and annual returns. Instead, the director can sign these documents, reducing administrative overhead.

Easy to Manage
Since only one person is involved in the establishment and management of the OPC, decision-making is swift and straightforward. Resolutions are passed by the single member and recorded in the minute book, eliminating conflicts of interest and streamlining governance.

Eligibility Criteria for One Person Company (OPC) Registration

To register a One Person Company (OPC) in India, the following eligibility conditions must be met:

• Natural Person Requirement: An OPC can only be established by a natural person who is an Indian citizen and resident of India. Recent amendments now also allow Non-Resident Indians (NRIs) to register an OPC.

• Individual Incorporator: Only an individual (natural person) can form an OPC. No other legal entity or company is permitted to incorporate an OPC.

• Minimum Age: The individual incorporating the OPC must be at least 18 years old.

• Single Member and Director: An OPC is restricted to having only one shareholder and one director. The sole member must appoint a nominee who is a different person and cannot also be the shareholder.

• Nominee Criteria: The nominee must be an Indian citizen and resident of India. The nominee takes over the company’s management if the sole member passes away or becomes incapacitated.

• Compliance with Companies Act: The sole member must not be disqualified under the Companies Act, 2013.

• Business Restrictions: Certain types of businesses cannot register as OPCs, including non-profit organizations, banking and financial institutions, and entities involved in securities investments.

• Turnover Limit: The OPC structure is best suited for small businesses with an annual turnover not exceeding INR 2 Crore.

Documents Required for One Person Company Registration

1. Memorandum of Association (MOA):
   A document that outlines the objectives for which the OPC is incorporated.

2. Articles of Association (AOA):
   The legal document specifying the company’s internal rules, regulations, and by-laws.

3. Nominee Appointment:
   Since an OPC has a single shareholder, it is mandatory to appoint a nominee who will take charge in case of the shareholder’s death or incapacitation. Submit the nominee’s details along with their consent, PAN card, and Aadhaar card using Form INC-3.

4. Address Proof of Registered Office:
   Submit proof of the registered office address along with ownership documents. If the property is rented, a No Objection Certificate (NOC) from the owner is required. The shareholder can also use their residential address if no commercial space is available.

5. Declaration and Consent:
   The proposed director must submit a declaration via Form INC-9 and consent via Form DIR-2.

6. Compliance Certificate:
   This certificate is signed by a qualified professional (usually a Company Secretary) confirming that the OPC has met all compliance and regulatory requirements as per the Companies Act, 2013.

7. Identity and Address Proof of Directors:
   Directors must provide valid identity and address proofs, such as:

   • PAN Card

   • Aadhaar Card

   • Passport

   • Voter ID

   • Driver’s License

Procedure for One Person Company (OPC) Registration

Step 1: Acquisition of Digital Signature Certificate (DSC)
The first step is to obtain a Digital Signature Certificate for the proposed director. The DSC is mandatory for electronically signing all documents related to the OPC incorporation.

Step 2: Securing a Director Identification Number (DIN)
Next, apply for the Director Identification Number for the proposed director. This is done by filing the SPICe+ form on the Ministry of Corporate Affairs (MCA) portal.

Step 3: Name Reservation for the OPC
Reserve a unique name for the OPC through the SPICe+ form on the MCA portal. The chosen name should not conflict with existing companies or trademarks.

Step 4: Drafting the Memorandum of Association (MOA) and Articles of Association (AOA)
Prepare the MOA and AOA, which define the company’s objectives, structure, and internal regulations.

Step 5: Submission of Registration Forms
Submit the completed registration forms along with all required documents through the MCA portal using the SPICe+ form. Required documents include:

• MOA & AOA

• Declarations from director and nominee

• Proof of registered office address

• Nominee appointment documents

• Any other documents specified by the MCA

Step 6: Issuance of Certificate of Incorporation
After verification, the Registrar of Companies (ROC) issues the Certificate of Incorporation, officially registering the OPC. The process also includes automatic allotment of the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).

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