OPC Registration Steps

A OPC Registration, also known as an OPC, is a type of private limited company that is registered under the Step by Step Process in India

One-Person Company – Overview

The concept of One Person Company (OPC) is relatively new in India, but it has gained significant popularity in other countries like Singapore, USA, and Europe. As of now, it remains somewhat uncertain how well this concept will function in India. According to the regulations, only a natural person who is an Indian citizen and resides in India is eligible to incorporate an OPC and can also act as a nominee for the sole member of such a company. Only time will reveal the true effectiveness and success of this model in the Indian corporate landscape.

A one-person company, also known as an OPC Registration, is a type of private limited company that is registered under the Companies Act of 2013. It can be registered with a single person who serves as both the company’s director and shareholder. Because OPC is a private company owned by a single person, they use ‘OPC private limited’ or ‘OPC Pvt Ltd’ at the end of their company name. Previously, a minimum of two directors and two members were required in a private limited company. A single person could not form a private company. However, a new concept of OPC was introduced by Section 2(62) of the Company’s Act of 2013, under which a single person can form a private limited company. Read here to know about OPC Registration Steps and Process in India.

Benefits of OPC Registration

1. 1. Limited liability
   2. Credibility
   3. Continuous existence
   4. Separate legal entity
   5. The business can obtain assets and incur debts in its own name
   6. NRIs can register One Person Company.

OPC Registration Steps

Find the OPC Registration Step-by-Step Process in India:

Step 1. Application for Digital Signature Certificate (DSC)

Because one-person company incorporation is a digital process, a digital signature certificate is required. The person who will act as a director and subscriber to the company’s memorandum must apply for a Digital Signature Certificate from one of the certified agencies. Obtaining a DSC is a completely online process that can be completed in less than 24 hours.

This process consists of three simple verification:

• Document verification
• Video verification
• Phone verification.

Step 2. Application for the Name Approval

The SPICe RUN form, which is part of the SPICe+ form, can be used to apply for a name for a single person company. While creating the company name application, the industrial activity code, as well as the object clause of the company, must be defined.

Step 3. Filing of SPICe Form (INC-32)

After the name has been approved, the company’s registration details must be written in the SPICe+ form. It is a simplified proforma for electronically forming a company. The following are the form’s details:

• Company information
• Member and subscriber information
• Director Identification Number (DIN)
• Director and subscriber applications for PAN and TAN declaration
• Professional declaration and certification

Step 4. Filing of e-MoA (INC-33) and e-AoA (INC-34)

The SPICe e-MoA and e-AoA are two linked forms that must be completed at the time of company registration. Section 2(56) of the Companies Act, 2013 defines a Memorandum of Association (MOA). It’s the foundation upon which the business is built. It establishes the company’s constitution, powers, and objectives. Section 2(5) of the Companies Act defines the Articles of Association (AOA). It lays out all of the company’s management rules and regulations in detail.

Step 5. Issuance of PAN, TAN & Certificate of Incorporation

The concerned department will issue PAN, TAN, and Certificate of Incorporation following approval of the documents mentioned above by the Ministry of Corporate Affairs. Using these documents, the company is now required to open a current bank account. You can get help with your current bank account opening by contacting us.

Disadvantages of OPC

Members

• One Person Company can have a minimum or maximum of only 1 member.
• Minors are not eligible to become members or nominees of a One Person Company or hold shares with beneficial interest.
• Only a natural person who is an Indian citizen and resident in India can incorporate a One Person Company and be a nominee for the sole member of the company.

Suitability for Small Businesses

One Person Company (OPC) is ideal for small businesses, as it can have a maximum paid-up share capital of ₹ 50 Lakhs or a turnover of ₹ 2 Crores. If these limits are exceeded, OPC must be converted into a Private Limited Company.

Business Activities

• One Person Company is restricted from engaging in Non-Banking Financial Investment activities, including investing in securities of other corporate bodies.
• One Person Company is ineligible for incorporation or conversion under Section 8 of the Act.

Perpetual Succession

The challenge lies in the very concept of creating a separate legal entity for perpetual succession in a company, even after the death or retirement of a member. The idea is that the nominee mentioned in the memorandum of association will become a member of the company upon the existing member’s demise. However, doubts arise about the effectiveness of this arrangement because the nominated person may not be actively involved in the company’s day-to-day operations and, therefore, might not be capable of successfully running the business after the original member’s passing.

Despite the various exemptions granted to a One Person company, such as conducting AGM (Annual General Meeting), EGM (Extraordinary General Meeting), relaxed quorum requirements for meetings, restrictions on voting rights, and filing financial statements, incorporating such a company involves significant paperwork compared to a sole proprietorship. These procedural complexities related to the incorporation of a One Person Company could make this concept less appealing to sole entrepreneurs.

Separation of Owner and Control

One of the defining features of a company, which faces significant challenges under the new Companies Act of 2013, is the blurred distinction between ownership and control. This ambiguity could potentially lead to the emergence of unethical business practices.

Other Disadvantages

An individual is restricted from incorporating more than one Person Company or serving as a nominee in more than one such company. Additionally, Non-Resident Indians (NRIs) are not permitted to incorporate a Person Company.

FAQs

Why Vakilsearch?

• We submit an application for name approval for your one-person business
• We will draft the MoA (Memorandum of Association) and AoA (Articles of Association) for you
• We will file the necessary documents with the MCA on your behalf. The PAN and TAN are assigned at the same time
• We’ll keep you up to date on the progress of your OPC Registration
• Avail of this service for just at ₹4600/– only.

Knowing the OPC Registration Steps in India, visit us at Vakilsearch to make the process easier.

Also, read:

• OPC Compliance Requirements
• Difference Between Sole Proprietorship and OPC