One Person Company (OPC) Registration

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OPC Registration-One Person Company Registration

OPC Registration-One Person Company Registration

One Person Company (OPC) is a company which has only one person as member.

One Person Company (OPC) is a type of private company.

Only a natural person, who is an Indian citizen and resident in India, shall be eligible for OPC registration /One person Company Registration and shall be a nominee for the sole member of an OPC.

An One Person Company (OPC) shall have a minimum of one director.

Therefore, an One Person Company (OPC) will be registered as a private company with one member and one director.

Eligibility for OPC Registration-One Person Company Registration

Minimum One Person

For OPC Registration /One Person Company registration in India, one person is required. One Person Company (OPC) shall have minimum one director.

The same person can become shareholder and director of the company.

No Minimum Capital

Capital of the One Person Company (OPC) business is depend upon the need of the business and statutorily no minimum capital is required to for OPC registration /One Person Company registration.

However, Minimum authorized and subscribed share capital required for OPC is Rupees 1 lakh.

One Resident Director

Among director, one person must be resident Indian.

Unique Name

The name of the One Person Company (OPC) should be unique and should not be similar to the any existing company name or trademark.

Documents Required for OPC Registration-One Person Company Registration

Identity Proof (Directors and Shareholders)

  • PAN Card for Indian Nationals (Mandatory)
  • Passport for Foreign Nationals (Mandatory)
  • Proof of nationality for Foreign Nationals
  • Proof of Identity (Voter ID /Passport /Driving License) (any one)
  • Resolution of the board of company / LLP for authorization of director/partner

Address Proof (Directors and Shareholders)

Bank statement / Electricity / Telephone / Mobile bill) (not older than two months) (any one)

Registered Office Proof

  • Conveyance/ Lease deed /Rent Agreement etc. along with rent receipts (any one)
  • Copy of the utility bills (Telephone / Gas / Electricity bill) (not older than two months) (any one)
  • NOC from Landlord

Digital Signature (DSC)

DSC form (physically signed)

NOTE: All the Documents in case of Foreign Director should be additionally complied as follows: (a) Notarized (if residing in commonwealth countries) (b) Notarized & Apostiled (if residing in country which is signatory to Hague convention) (c) Notarized & Consularised (If not covered in above categories)

Procedure for OPC Registration-One Person Company Registration

OPC Registration-One Person Company Registration

Reserve Name of Company

The first step in incorporation is to reserve/approve the name of company.

The proposed name selected should do not contain any word which is prohibited under Companies Act, 2013.

An approved name is valid for a period of 20 days from the date of approval, for a new company.

It is permitted to apply for two proposed names and one Resubmission (RSUB) while Reserving Unique Names for companies through the RUN web service.

Take DSC of Director and Subscribers

Section 18 of the Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically.

This is the only secure and authentic way that a document can be submitted electronically.

As such, all filings done by the companies under MCA21 e-Governance programme are required to be filed with the use of Digital Signatures by the person authorised to sign the documents.

Acquire DSC – A licensed Certifying Authority (CA) issues the digital signature. Certifying Authority (CA) means a person who has been granted a license to issue a digital signature certificate under Section 24 of the Indian Information Technology Act, 2000.

Register DSC – Role check for Indian companies is to be implemented in the MCA application. Role check can be performed only after the signatories have registered their Digital signature certificates (DSC) with MCA.

Approval of Other Regulators, (if required)

Proviso to Rule 12 of the Companies (Incorporation) Rules, 2014 provides that in case pursuing of any of the objects of a company requires registration or approval from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board, registration or approval, as the case may be, from such regulator shall be obtained by the company before pursuing such objects and a declaration in this behalf shall be submitted at the stage of incorporation of the company.

Preparation of Documents & E-Application

Documents like Memorandum of Association, Articles of Association & other supporting incorporation documents and E-form for filing online application are prepared in house and then it is filed online on the portal of MCA21.

According to Section 7 of the Companies Act, 2013, all documents related to incorporation shall be filed before the Registrar, in whose jurisdiction registered office of a company is proposed to be situated. A Registrar may have jurisdiction over several states or only a part of a state.

Get Certificate of Registration, PAN and TAN

On receipt of the aforementioned documents, the office of the Registrar of Companies will scrutinise them and if they are found complete in all respects, the Registrar will register the company and generate a CIN.

If the Registrar finds any defect or deficiency in any of the documents or forms, the Registrar will send an electronic communication pointing out the defects and after the deficiencies are removed, the Registrar will register the company.

After the registration of the company, the Registrar will issue under his hand and seal of his office, the Certificate of Incorporation in the name of the company and send it electronically.

One may also take printout of the Certificate of Incorporation generated online.

The date mentioned by the Registrar in the Certificate of Incorporation shall be the date of incorporation of the company, on which date the company will be considered to have come into existence as a legal entity separate from its subscribers.

The Certificate of Incorporation shall be in Form INC-11 of the Companies (Incorporation) Rules, 2014 and the Certificate Information shall mention permanent account number of the company where if it is issued by the Income Tax Department.

Open Bank Account

After getting the Certificate of Registration, private company can apply for opening a current account into bank for handling day to day transactions.

Advantages of OPC Registration-One Person Company Registration

Individual Entrepreneurship

One Person Company /OPC company gives the individual entrepreneurs all the benefits of a company, which means they will get credit, bank loans, access to market, limited liability, and legal protection available to companies.

Opportunities for Small Businessmen

One Person Company (OPC) would provide tremendous opportunities for small businessmen and traders, including those working in areas like handloom, handicrafts and pottery.

Less Compliance

The amount of compliance by a One Person Company /OPC company is much lesser in terms of filing returns, balance sheets, audit etc.

Limited Liability of Shareholder

Liability of shareholders of the One Person Company /OPC Company are limited only up to the shares subscribed by them and should not be personally liable for the debts of the company in case company are unable to pay its liabilities.

Separate Legal Entity

One Person Company /OPC Company legal entity are separate than its shareholders /promoters.

Perpetual Existence

One Person Company /OPC Company existence will go for ever and its existence will not be affected by the death of shareholders, directors or transfer of shares to others.

Capacity to Sue and to be Sued

One Person Company /OPC Company can take legal action against another and also other person can take legal action against company separate from directors, shareholders & promoters.

Ownership of Property

One Person Company /OPC Company can sale, purchase and own the property like individual.

Contractual Rights

One Person Company /OPC Company, being a legal entity different from its members, can enter into contracts for the conduct of the business in its own name.

Frequently Asked Questions (FAQs) to One Person Company

What is One Person Company (OPC)?

“One Person Company” means a company which has only one person as a member;

How to inform ROC about change in membership of OPC?

The company shall file form INC-4 in case of cessation of member of OPC on account of death, incapacity to contract or change in ownership. In the same form, user needs to provide details of the new member of the OPC.

Is there any threshold limits for an OPC to mandatorily get converted into either private or public company?

In case the paid up share capital of an OPC exceeds 50 lakh rupees or its average annual turnover of immediately preceding 3 consecutive financial years exceeds 2 crore rupees, then the OPC has to mandatorily convert itself into private or public company.

How to intimate ROC that the OPC has exceeded the threshold limits and require conversion into private or public company?

The OPC shall inform RoC in form INC-5 within 60 days of exceeding threshold limits and is required to be converted into private or public company.

Is there any form that is to be filed for conversion of an OPC into private or public company? Is there any other purpose for filing this form?

Form INC-6 shall be filed by an OPC for conversion of an OPC into private or public company. Form INC-6 shall be filed within 30 days in case of voluntary conversion and within six months of mandatory conversion.

Yes, the private company will also file form INC-6 for converting itself into an OPC. The paid up share capital of private company should not be exceeding fifty lakh rupees and should not have average annual turnover more than two crore rupees at the time of such conversion into OPC. The company shall be having one member and shall appoint one nominee to act as member in case of death or incapacity of the member at the time of conversion into OPC.

Who is eligible to act as a member of an OPC?

Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC.

For the above purpose, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.

A person can be a member in how many OPCs?

A person can be member in only one OPC.

What if a member of an OPC becomes a member in another OPC by virtue of being a nominee in that other OPC?

Where a natural person, being member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of 182 days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days.

Which form is to be filed in case of withdrawal of consent by the nominee of an OPC or in case of intimation of change in nominee by the member?

Form INC-4 shall be filed in case of withdrawal of consent by the nominee or in case of intimation of change in nominee by the member.

What is “Authorised Capital” or “Nominal Capital”?

“Authorised capital” or “Nominal capital” means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company;

What is “Board of Directors” or “Board” in relation to a company?

“Board of Directors” or “Board”, in relation to a company, means the collective body of the directors of the company;

What is “Books of Account” for purpose of company?

“Books of account” includes records maintained in respect of—
(i) all sums of money received and expended by a company and matters in relation to which the receipts and expenditure take place;
(ii) all sales and purchases of goods and services by the company;
(iii) the assets and liabilities of the company; and
(iv) the items of cost as may be prescribed under section 148 in the case of a company which belongs to any class of companies specified under that section;

What is called-up capital?

“called-up capital” means such part of the capital, which has been called for payment;

What is Chief Executive Officer?

“Chief Executive Officer” means an officer of a company, who has been designated as such by it;

What is meaning of director?

“director” means a director appointed to the Board of a company;

What is financial statement?

“financial statement” in relation to a company, includes—
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv):

The financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement;]

What is Issued Capital?

“Issued capital” means such capital as the company issues from time to time for subscription.

Who are key managerial personnel?

“key managerial personnel”, in relation to a company, means—
(i) the Chief Executive Officer or the managing director or the manager;
(ii) the company secretary;
(iii) the whole-time director;
(v) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and
(vi) such other officer as may be prescribed]

Who is Managing Director?

“Managing director” means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called.

The power to do administrative acts of a routine nature when so authorised by the Board such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on the account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within the substantial powers of management.

Who are member?

“Member”, in relation to a company, means—
(i) the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members;
(ii) every other person who agrees in writing to become a member of the company and whose name is entered in the register of members of the company;
(iii) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository;

What is Paid-up share capital?

“Paid-up share capital” or “Share capital paid-up” means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid-up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called;

What is share?

“Share” means a share in the share capital of a company and includes stock.

What is Subscribed capital?

“Subscribed capital” means such part of the capital which is for the time being subscribed by the members of a company;

What is Whole-time director?

“whole-time director” includes a director in the whole-time employment of the company;

What type of OPC can be formed/incorporated?

As per section 3(1) and (2), OPC can only be incorporated as a private limited company. Such a company may either be:

  • a company limited by shares; or
  • a company limited by guarantee; or
  • an unlimited company

Is it necessary to write the words “one person company” after the name of any such company?

Yes. as per 2nd prviso to Sec 12(3) provides that the words ‘‘One Person Company’’ shall be mentioned in brackets below the name of such
company, wherever its name is printed, affixed or engraved.

Can OPC engage in all business activities?

OPC needs to be formed for any lawful purpose.

As per Rule 3(6) of the Companies (Incorporation) Rules 2014, such companies cannot engage in “Non Banking Financial Investment” activities including “investment” in securities of anybody corporate.

Is OPC required to file Annual Return?

Yes, because as per the proviso to section 92(1) of the Companies Act 2013, the annual return in case of OPC shall be signed by the company secretary or where there is no company secretary, by the director of the OPC.

Is OPC required to hold AGM?

It is Optional [as per section 96(1) of the Companies Act 2013]

Who shall sign the financial statement of a OPC?

As per section 134(1) of the Act, the financial statement of a OPC is required to be signed only by one director, for submission to the
auditor for his report thereon.

In what manner is OPC required to prepare its report of Board?

As per section 134(4) of the Act, the report of the Board of Directors to be attached to the financial statement shall, in case of a One Person Company, mean a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.

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