One Person Company (OPC) Registration in India

Overview of OPC Registration in India

Prior to the implementation of the Companies Act of 2013 only two people could form a company. The Companies Act of 2013 supports the formation of One Person Company (OPC) in India. It governs the registration and functioning of one person company in India. In comparison with a public company a private company should have at least two directors and two members however on the contrary, one person company doesn't need any group of people to be incorporated.

As per the Section 262 of Companies Act of 2013 and official registration of a one person company in India is legal. Registering an OPC in India requires a single director and a single member representing the whole firm. This corporation type has very few compliance requirements in comparison with a private corporation.

Documents Needed for OPC Company Registration

A scanned replica of a current bank statement

You can access bank statements online through internet banking or by visiting a bank location. Account statements and transaction summary statements are other names for them that are frequently used.

An electricity or gas bill, a phone bill, and a mobile bill

Utilities costs typically cover electricity, gas, water/sewage, and rubbish disposal. Since they are now considered ordinary in the majority of Indian households, other services like internet, cable TV, and phone services are occasionally regarded as extra utilities. The price of utilities can vary widely, largely depending on your region, the temperature where you live, and your usage patterns. Hence these are also submitted as important documents for OPC registration.

Rental agreement in English transcribed in a digital format

Rental agreements are usually handed over as hard copies to the tenants. This has to be scanned and provided to the authority for documentation.

A landowner's no-objection certificate transcribed in a digital format

This document is from the landowner of the specific land. Every company must always maintain a registered address for the corporation under Section 12 of The Companies Act, 2013 When a business is incorporated in India, the registered address is provided as an attachment to the Spice+ form. However, if the business's address changes after incorporation, a Form INC-22 notification of the new registration address of the company must be submitted to the ROC.

A property or sale deeds scanned copy in English language (if the property is owned)

A sale deed is a legal document used in real estate transactions to prove the purchase and transfer of property ownership from the seller to the buyer. This is the primary ownership transfer paperwork. A sale deed is sometimes known as the conveyance deed or the final deed.

Steps to Incorporate an One Person Company in India

• Step 1: Check the eligibility and documentation
• Step 2: Request DSCs and DINs for each director
• Step 3: Submit a request for a name reservation Form Spice+ for company incorporation
• Step 4: Apply for PAN and TAN for your new business
• Step 5: RoC issues an incorporation certificate with a PAN and TAN
• Step 6: Open a bank account and start your business.

The whole process for registering a one person company can be completed in a time span of just 20 days. All you have to do is reach out to Vakilsearch and complete the process with no delay.

Vakilsearch Registration Package for One Person Company in India

• Vakilsearch registration package provides a Digital Signature Certificate online for one of your director's
• We will also provide a Directors Identification Number (DIN) (If the shareholders are different from directors, then additional DSC is required for shareholders)
• Our Business experts will provide assistance with deciding the company name
• PAN and TAN, drafting the articles of association, paying the government stamp duty and the certificate of incorporation fee, obtaining the name approval certificate, and registering for GST, PF, ESI, and PT (only applicable in Maharashtra) will be done with utmost care and speed
• A Zero balance current account will be opened in DBS or ICICI.

Checklist for One Person Company Registration

• Maximum and minimum membership requirements must be met
• There should be a nominee chosen before incorporation
• Use Form INC-3 to request the nominee's approval
• The Companies (Incorporation Rules) 2014 mandate that the OPC name be selected
• Minimum authorised capital of ₹1 Lakh
• DSC of the potential director
• Evidence of the OPC's registered office.

Features of One Person Company

Easy Succession

Despite having a single person running all the daily activities of the company, OPC provides options for perpetual succession. After the demise of a member of the company, the nominee can run the company.

Limited Liability

The member in a one-person company has limited liability. Since OPC is a registered company it is treated as a separate legal entity providing greater protection to its members. The liability of the member is limited to their shares so they are not liable for any losses conducted in the company. In case of bankruptcy, the creditors can sue the company and not the director of the company for procuring the company's debt.

Sole Directorship and Shareholder

In an OPC a single member acts as a director so they stand liable for managing the company's day-to-day activities. In this case, there is no need for an executive director to run the daily needs. A single member is more than sufficient and acts as a shareholder with all responsibilities.

Ownership in Property

Since the OPC is treated as a separate legal entity the person has the right to hold property related to business and other assets in their name. The properties including machinery factories, residential property, buildings, and other assets cannot be claimed by another person. As per law, the OPC can acquire property directly under its name.

Restrictions on One-Person Company

Despite having major advantages, opening a one person company also comes with a certain set of restrictions.

Not Apt for Scalability

Registering your business as an OPC is a perfect option for a small business structure. However, if you are planning to scale it up on greater levels then this might not work.at any given time the total number of people in an OPC is always one. If you are planning to add more members and have more shareholders you cannot register your business as OPC. So OPC is not apt to raise further capital. This will inhibit the expansion and growth of businesses.

Higher Restrictions on Business Activities

As per the rules and regulations, OPC is not permitted to conduct non-banking financial investment activities. Registering yourself as an OPC will not provide freedom to invest in the security of other corporations.

No Clear Distinction Between Ownership and Management

Since the one-person company has a single person to act as both the director of the company and the management there is no clear distinction between both roles. A single person is permitted to take and approve all the decisions. So, there are higher chances of unethical practices.

Advantages Of OPC Company in India

Legal Standing

The member grants the OPC a separate legal entity status. The sole person who incorporated the OPC is protected by its distinct legal status. The member is not personally liable for the company's loss; instead, his or her liability is limited to the value of the shares that he or she owns. Therefore, the OPC and not the member or director may be sued by the creditors.

Easy Access to Funding

One person company in India can easily raise money through venture capital, angel investors, incubators, and other sources because it is a private company. Getting money is now simple.

Less Conformity

The One Person Company (OPC) is given some exemptions from compliance requirements under the Companies Act of 2013. The OPC is not required to prepare the cash flow statement. The secretary of the company is not required to provide any annual reports and maintain any account books.

Easy Integration

And one person company in India can be easily integrated without any legal hassles. A member also serving as a director should provide the approval for integration. There is no minimum paid up capital requirement.

Easy to Manage

Administration of the OPC can be made simple by allowing a single person to both find and lead it. Making decisions is straightforward, and it happens quickly. The member can easily pass both ordinary and special resolutions by writing them down in the minutes book and getting just one other member to sign them. Because there won't be any internal disputes or delays, managing the company will be easy.

Constant Repetition

The OPC has the function of perpetual succession even with only one member. A nominee must be chosen by the single-member when incorporating the OPC. The candidate will take over operation of the company in the event that a member passes away.

Why Vakilsearch?

• We submit a name approval application for your sole proprietorship
• Experts at Vakilsearch will draft the MOA and AOA on your behalf, and will file the necessary paperwork with the MCA to be incorporated
• Allocation for PAN and TAN happens simultaneously
• Our team of experts will let you know how your OPC Registration is progressing.
• Basically we have got you completely covered.