What is One Person Company?
One Person Company (OPC) is a company which has only one person as member. OPC is a type of private company. Only a natural person, who is an Indian citizen and resident in India, shall be eligible to incorporate an OPC & shall be a nominee for the sole member of an OPC. An OPC shall have a minimum of one director. Therefore, an OPC will be registered as a private company with one member and one director.
What are eligibility criteria for OPC registration?
- Minimum One People: One person is required to start the OPC in India. These companies shall have minimum one director. The same person can become shareholder and director of the company.
- No Minimum Capital: Capital of the business is depending on the need of the business and statutory no minimum capital is required to start the OPC. However, Minimum authorized and subscribed share capital required for OPC is Rupees one lakh.
- One Resident Director: Among director, one person must be resident Indian.
- Unique Name: The name of the OPC should be unique and should not be similar to the any existing company name or trademark.
What are documents required for OPC registration?
Identity proof of Directors and Shareholder
- 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)
- 2 Passport size photos.
Address proof of Directors and Shareholder
- Bank statement/Electricity/Telephone/Mobile bill) (not older than two months) (any one)
Proof of Registered office
- 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
- DSC form (physically signed)
Note: All the Documents in case of Foreign Director should be additionally complied as follows:
- Notarized (if residing in commonwealth countries)
- Notarized & Apostiled (if residing in country which is signatory to Hague convention)
- Notarized & Consularised (If not covered in above categories)
What are procedure for OPC registration?
- Name reservation: 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. In Form SPICE (INC-32) name approval can be applied simultaneously with application for company registration.
- Digital Signature Certificate (DSC) of Director and Shareholder: The application for OPC is filed online and it is mandatorily required to be signed by the director and shareholder of the company. So DSC is required to be taken for the directors and shareholder of the company, who is required to sign the e-form for registration before filing incorporation application for the company. Photo, ID and Address proof is required to along with DSC application form for issuance of DSC.
- Director Identification Number (DIN): It is a unique identification number to the director issued by Registrar of the companies (ROC) for becoming a director in India. If proposed directors already have approved DIN then that will be used and if proposed directors do not have approved DIN then DIN will be approved simultaneously with Registration of company.
- Approval of other authorities: The Registrar of Companies may require the applicant to furnish the approval or concurrence of any department,regulatory body, appropriate authority, or Ministry of the Central or State Government(s) in relation to the work to be done.
- Document submission: Application for registration/incorporation of OPC is made to Registrar of Companies (ROC) along Memorandum and Article of Associations, declaration, affidavits etc.
- Certificate of Incorporation: ROC then scrutinizes the incorporation form and documents, if ROC finds the documents are in order, issues Certificate of Incorporation which is the Registration certificate of OPC. After receiving the certificate of Incorporation the OPC is set to roll out its function.
- PAN & TAN of the company: PAN and TAN are simultaneously applied alongwith company registration forms and are mentioned in Certificate of Incorporation.
- Opening of Bank Account: On submission of Certificate of Incorporation & other essential documents, bank open a current account in name of company, required for smooth running of the company.
What are advantages of OPC registration?
- Individual Entrepreneurship: OPC 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: 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 OPC is much lesser in terms of filing returns, balance sheets, audit etc.
- Limited Liability of shareholder: Liability of shareholders of the OPC 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: OPC legal entity are separate than its shareholders/promoters.
- Perpetual Existence: OPC 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: OPC can take legal action against another and also other person can take legal action against company separate from directors, shareholders & promoters.
- Ownership of property: OPC can sale, purchase and own the property like individual.
- Contractual Rights: OPC, being a legal entity different from its members, can enter into contracts for the conduct of the business in its own name.