What is a One Person Company? / What is a One Person Company registration?
The concept of One Person Company was introduced in India by the ministry with a viewpoint that there are people who want to avail the benefits of a company but at the same time want to retain the status of a proprietor. OPC is basically an amalgamation of a private limited company and a proprietorship. By now you have a clear image of what an OPC is, i.e. it is a type of a company where a single person can start business with limited liability.
What are key features?
Key features of OPC includes:
Single Member-
In an OPC, a single person can act as both the director and
shareholder of the company.
Limited liability-
Earlier before the concept of OPC was introduced in India, people who
wanted to do business as a single person had to form a proprietorship
firm. Here the liability of business did not end with the assets of
the business only, but it extended to the proprietor that is the
owner’s assets also. This is known as unlimited liability. Now with
the introduction of OPC, a single person can now start a business with
a limited liability where the liability of the business can not extend
to the owner making the owner risk free of losing personal assets.
Separate Legal Entity-
An OPC and the owner are two separate legal entities. The OPC can own
assets, have liabilities, enter into contracts, can sue and be sued in
its own name without affecting the owner.
Nominee Director-
At the time of formation of an OPC, the member has to nominate a
person as nominee director who will become director, that is to take
over the business in the event of the original director/member
becoming incapacitated or passes away.
Statutory compliances-
An OPC must comply with the statutory compliances laid down by the
ministry of corporate affairs such as filing annual returns,
maintaining records, keeping financial statements up-to-date, etc.
Perpetual succession-
An OPC has a perpetual succession which means that whether the member
dies or becomes incapacitated, the company always continues to exist.
The nominee director takes over the company after the death of the
member/original owner of the OPC.
No minimum capital requirement-
There are rules as to what should be the minimum capital required to
start an OPC as compared to a private limited company. A person can
start a business as an OPC with any amount of initial capital.
Overall the OPC is a great option for the individuals who want to
start business without any partners and want to have a limited
liability. It is becoming a popular option for small businesses,
consultants and professionals who operates as sole proprietors or
unregistered entities.
Benefits of Registering One Person Company
- Incorporation is easy
- Least requirement for registratoin
- Compliance is easy and flexibile taxation
- Individual has complete control
- Benefits for small scale industries
- Ease of funding
- Greater credibility than sole proprietorship
- Significant growth
- Income tax benefits
- Sole business ownership
- Increased transparency
- Beneficial to sectors like MSME and SME
Eligibility Criteria for Registering One Person Company
- Only a natural person who fulfills the requirement of resident of India in preceding calendar year can form an OPC.
- Only One member is allowed in an OPC.
- The name should be unique.
- The name of the compant must include (OPC) private limited.
- Atleast 1 director is required. The member himself can become the director.
- No paid-up capital and turnover requirements anymore.
- Nominee is a must.
Documents Required for One Person Company Registration
- The following documents are required:
- PAN card/ Passport
- Passport in case of NRI and foreign Individuals
- Scanned transcript of voter's ID and driver's license
- Latest gas or electricity invoice/bank account statement/ mobile phone orlandline invoice
- Specimen Signature of the member
- Passport-size photograph
- These documents should be self-attested. The paper works of NRIs must be notarized or apostilled.
- Other supporting documentsrequired for registered office are-
- Scanned transcript of Latest gas or electricity invoice/bank account statement/ mobile phone orlandline invoice
- Scanned transcript of rent agreement.
- Scanned transcript of no-objection certificate (NOC) from the owner of the rented/leased premises. In case the member owns the property, the proof of ownership is required.
Procedure for Registering One Person Company
- Firstly, Obtain a DSC
- Secondly, Obtain a DIN
- Thirdly, Get name approval
- Fourthly, Incorporate the OPC
- Lastly, Obtain a certificate of Incorporation