Starting a business is the toughest decision one can take but it gives you the maximum fulfilment of your dreams and desires. Your decision to begin your entrepreneurial journey starts with the decision of selecting the right business structure to follow. One Person private Limited Company can be chosen to build a scalable business. It’s the one of the most famous legal structure for the business preferred after private limited company, like any other company it also have multiple benefits such as limited liability, separate legal entity, ease in share transfer etc.
What is One Person Company (OPC)?
Earlier, there was no provision for a single person to start a company on its own without the involvement of any other person. In order to encourage and support entrepreneurs who do not want to involve any other person as an economic entity, the concept of OPC was set in motion through the Companies Act, 2013 under Section 2(62). Under OPC one can avail the benefits of a sole proprietorship and company.
The biggest advantage of OPC is – that there can be only one member as sole owner who will be responsible for all the economic and organisation decisions. It is mostly preferred for the micro-businesses.
Similar to private limited company, an OPC also have a capital requirement. This capital is introduced by the shareholder. The capital amount can be introduced in two forms -
Authorized share capital
Paid up capital.
The minimum amount of authorized share capital, with which a company can initiate the registration process, is 1 lac INR. However, there is no minimum cap on limit of paid up capital.
An OPC private limited company also has a certain set of rules and guidelines which are confined in MOA and AOA. Memorandum of Association (MOA) and Articles of Association (AOA) are the master documents of the private limited company determining the guidelines, mutual rights and duties between directors and shareholders. MOA comprises of 6 clauses –
Name clause – under this the name of the company is specified. The name is selected as per the Rule 8 of Companies Act, 2013. It should not be identical to any existing company’s name or with any trademark.
Registered Office clause – This clause helps to determine the state jurisdiction of Registrar of Companies.
Object clause – In this clauses, one defines the object of the company. The object comprises of all the activities or work to be carried in the organization. The company involve in any activities outside their company’s object.
Liability clause – under this clause, the liability of the shareholders is defined. In case of the company limited by shared, the liability of the members or the shareholders is restricted by the amount each member has agreed to contribute.
Capital clause – This clauses defines the maximum number of share the company can issue
AOA (articles of association) defines the set of rules and regulations for the management. It lays down the internal guidelines to be followed in the organization.
Is a One-Person Company right for you to start?
If you want to have full control over your business with limited liabilities, then OPC is the best choice to start with. But ensure that you convert your business structure (within six months) to the private limited company after crossing an average turnover of 2 crores over three consecutive years or has a paid-up capital of over 5o lakhs.
Key highlights | Requirements | Documents Required to Register One Person Company
Why to choose OPC -
Single owner can start their business
Not affected by the death of a member or shift in ownership.
Limited liabilities of its members
eligible for Banking loans, credits
No interference from any third person can be involved
Key highlights of OPC private limited company -
Limited Liability – The limited liability shields the share holders from personal liability and protects from other risks and losses.
Attracts more vendors as well as employees
Procures good investment from reliable investors.
Increases the potential to grow and expand
Requirements for OPC registration -
Only an Indian Citizen and resident in India can incorporate OPC.
Entities such a Company or LLP cannot be a director in an OPC.
The minimum authorised capital required to incorporate is Rs 1,00,000.
A nominee must be appointed at the time of incorporation.
Financial activities can’t be carried out in OPC
The Documents Required for Incorporation -
Identity proof of all Directors (Aadhar card, Driving License, PAN card, Passport)
Address Proof all directors (Voter ID card, Passport)
Address proof of company registered office (Rent agreement, Possession letter etc.)
Electricity Bill of the registered office building
It’s necessary to apply for a Digital signature of the designated partners before starting the company registration.
The DSC is important as all the documents before submission are required to be digitally signed.
Step 2: Apply for DIN (Director Identification Number)
The application for DIN is mandatory for each director.
The DIN application has to make in Form DIR-3.
Step 3: Name Approval and its Reservation
The name approval is an important step to establish a company.
RUN (Reserve Unique Name) form is filled for the reservation of the name given by the company.
The name provided must be as per the rule 8 of Company Registration Act, 2013
Step 4: Preparation of form INC 33 and INC 34
This step involves the drafting of MOA and AOA. These are drafted under INC 33 and INC 34 respectively.
If required we can file for ESI, EPF, GST at the same time under the form names AGILE
Step 5: Incorporation of private limited
For the Incorporation of OPC private limited company, the incorporation forms (INC 33, INC 32, AGILE) are uploaded with SPICe form INC 32. These are to be filled with Registrar of companies of the respective state in which the registered office of the company is located.
Step 6: Approval of the documents
Once the SPICe form INC– 32 is approved, the registrar provides the company identification number (CIN) along with PAN and TAN of the company
Corpseed Three Easy Steps for OPC Registration
Fill-up our requirement form
We'll collect all your documents and file them directly with the authority
You'll receive your completed One-Person Company registration package by E-mail
If above benefits & Liabilities satisfy your business requirement, then OPC might best suit your business needs. Now in order to run One Person Company, a little more preparation will definitely go a long way.
Our expert CA / CS will help you to identify the various types of licenses /Registration/Permits required to start your One Person Company.
For example, to start your food business as an OPC, you might need to register with FSSAI or get FSSAI License.
Liabilities of a Private Limited Company
OPC must nominate a nominee director in the MoA and AoA of the company, the nominee director will become the owner of the OPC in case the sole Director gets disabled.
NRI’s or Foreign nationals cannot own a One Person Company
File annual returns with MCA (Ministry of Corporate Affairs)
Annual account audit by a CA is mandatory
One Person Company requires filing the annual return with the Income Tax Department
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Each company in India has to follow a set of compliances as set by different other regulatory bodies. The ‘Company Annual Compliance’ regimes need companies to gather their business information and update the regulatory bodies such as Ministry of Corporate Affair (MCA), Income Tax Department other regulatory bodies.
Benefits| Limitation | Compliances and Exemptions of One Person Company
Benefits under OPC Private Limited Company Registration
Separate Legal Entity: Company legal entity are separate than its shareholders/promoters.
Capacity to Sue and to be Sued
A Private limited company can sale, purchase and own the property like individual on its own name.
Private limited companies can easily avail financial assistance/borrowing from banks and financial institution compared to another form of entity.
Easy funding from investors
Continuity of existence
Limitation of OPC –
OPC must be converted to a private limited company when –
paid-up share capital exceeds Rs.50 lakhs
Turn-over crosses Rs.2 crores.
Compliances and Exemptions of OPC –
Audit - Statutory audit of financial statements by CA every year
Appointment of Auditor
Board meeting - minimum two board meetings
Yearly ITR filing
Maintain statuary registers
Form AOC-4 for financial statement
MGT-7 for an annual return
ESI and PF returns – if any
GST returns – if any
OPC is exempted from holding Annual General Meetings and Board Meetings.
Notice of the meeting is not required
There is no requirement of quorum for meetings.
No requirement of voting
In case your OPC exceeds annual sales turnover by Rs.2.00 crores or the paid-up capital exceeds Rs.50 lakhs, then it's mandatory to convert your OPC into a Private Limited Company. A private limited company has less limitations and less liabilities as compared to OPC.
How to get One Person Company Registration?
Connect With Corpseed
Connect with the team corpseed to discuss specific requirements for your business at IVR: +91 7558 640 644 or email@example.com. It takes 20-25 minutes to discuss requirement.
Once you discuss the requirement, we will align a dedicated Account managers are here to help understand your business and provide best solutions and assist you with the entire process.
Real Time Update
Use our platform to track progress of application and many more. Always know what is going on with your application, what is in progress, and what is done.
Once job is completed, you will receive documents directly to your email ID and at your doorstep along with 30 days payback guarantee incase not satisfied with the services.
No, you need not to be present at our office or appear at any office for the incorporation of a One-person Company. All the documentation has been completed by us. In case of any communication during incorporation, we might use email to receive or send documents to you.
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