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One-Person Company (OPC) Registration
Registering a One-Person Company (OPC) is an appealing choice for entrepreneurs seeking limited liability and a distinct legal identity. OPC is a unique business structure that allows a single individual to operate as a company, providing the benefits of limited liability while retaining full control. In an OPC, the individual takes on the roles of both director and shareholder, effectively combining the advantages of a sole proprietorship with the legal protection of a private limited company. At bmcsindia, we specialize in simplifying the OPC registration process, ensuring entrepreneurs can navigate the complexities of legal formalities smoothly. Our experienced team is dedicated to assisting you at every step, from document preparation to filing, providing expert guidance to help you make well-informed decisions regarding your OPC setup.
Contact us now and take the first step towards realizing your entrepreneurial dream!
Introduction to One Person Company (OPC)
One Person Company (OPC) registration in India was introduced as a concept under the Companies Act of 2013, allowing a single individual to establish a company and enjoy the combined benefits of both a sole proprietorship and a traditional company structure. This concept became available with the implementation of the Companies Act in 2013. The primary objective behind the creation of one-person companies was to promote entrepreneurship and encourage the formalization of Micro, Small, and Medium Enterprises (MSMEs). According to Section 2(62) of the Companies Act 2013, a company can be formed with just one director and one member, and interestingly, these roles can be held by the same individual.
Eligibility Criteria
Before proceeding with the registration of a one-person company (OPC), it's vital to have a clear understanding of the specific eligibility criteria and limitations that govern its formation. The Companies Act outlines specific requirements that must be met to ensure the eligibility of the individual initiating the OPC.
- Natural Person and Indian Citizen: Only a natural person who is an Indian citizen can establish an OPC. Legal entities like companies or LLPs cannot create an OPC.
- Resident in India: The promoter must be a resident in India, which means they should have resided in India for at least 182 days during the previous calendar year.
- Minimum Authorized Capital: The OPC must have a minimum authorized capital of Rs 1,00,000, the amount stated in the company's capital clause during registration.
- Nominee Appointment: The promoter must appoint a nominee during the OPC's incorporation. This nominee would become a member of the OPC in the event of the promoter's death or incapacity.
- Restrictions on Certain Businesses: Businesses involved in financial activities such as banking, insurance, or investments cannot be established as OPCs.
- Conversion to Private Limited Company: If the OPC's paid-up share capital exceeds 50 lakhs or its average annual turnover surpasses 2 Crores, it must be converted into a private limited company to comply with the regulatory requirements for larger companies.
It's important to highlight that an individual can establish only one OPC, and an OPC cannot have a minor as its member. These additional restrictions further clarify the eligibility and operational requirements for OPCs in India.
Advantages of One Person Company (OPC)
Advantages of One Person Company (OPC) include the following:
- Legal Status: An OPC acquires a distinct legal entity status, shielding its founder from personal liability for company losses.
- Easy Fundraising: As a private company, OPCs often have an easier time securing funds from venture capitalists, angel investors, and banks compared to proprietorship firms.
- Reduced Compliance: OPCs benefit from specific exemptions from compliance requirements under the Companies Act, 2013, streamlining administrative obligations.
- Simple Incorporation: OPCs can be established with just one member and one nominee, with the member also serving as the director. The absence of a minimum paid-up capital requirement simplifies the incorporation process.
- Efficient Management: With a single individual managing the OPC, decision-making is swift, contributing to efficient company management without conflicts or delays.
- Perpetual Succession: OPCs maintain perpetual succession, ensuring the company's continuity even with only one member.
In conclusion, One Person Companies (OPCs) offer several advantages, including limited liability, ease of fundraising, reduced compliance, straightforward incorporation and management, and perpetual succession. These benefits make OPCs an attractive choice for entrepreneurs looking to establish their businesses while enjoying legal protection and simplified operational procedures.
Disadvantages of OPC
While OPCs offer advantages, there are also limitations:
To operate a proprietorship business in India, the proprietor is required to secure both PAN and Aadhar. Furthermore, they must obtain GST registration, UDYAM registration, and establish a current bank account. In certain states, compliance with the Shops & Establishment Act registration may also be mandatory.
It's important to note that, beyond these fundamental prerequisites, additional licenses and permits may be necessitated, contingent upon the specific industry, state, and local regulations.
- Suitable for Small Businesses: OPCs are primarily suitable for small-scale businesses as they can only have one member. This limitation can hinder their ability to raise additional capital as the business expands.
- Restriction on Business Activities: OPCs are subject to restrictions concerning certain business activities, such as non-banking financial investments and charitable objectives.
- Ownership and Management: There's a lack of a clear distinction between ownership and management in OPCs, as the sole member can also serve as the director. This arrangement may potentially give rise to ethical concerns or conflicts of interest.
Required Documents
As part of the OPC registration process, it’s crucial to prepare and submit several essential documents to the Registrar of Companies (ROC). These documents typically include:
- SMemorandum of Association (MoA)
- Articles of Association (AoA)
- The nominee's consent, along with their PAN card and Aadhaar card, must be submitted via Form INC-3.
- Proof of Registered Office
- The proposed director should furnish a declaration in Form INC-9 and their consent in Form DIR-2.
- A declaration by a qualified professional certifying that all necessary legal compliances have been adhered to.
Registration of One Person Company (OPC) in India
In India, the registration of a One Person Company (OPC) is facilitated through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form, which has replaced the previous application forms for company incorporation.
The registration process for an OPC consists of two parts:
Part A: In this initial section of the SPICe+ form, the focus is on securing approval for the desired company name and applying for the Director Identification Number (DIN) or Permanent Account Number (PAN) for the proposed director.
Part B: The subsequent segment, known as Part B, involves providing incorporation-related details. Here, essential information such as the registered office address of the OPC, details about share capital, particulars of the director, and information about the shareholder is provided.
Here are the steps involved in the OPC registration.
Step 1:Obtain a Digital Signature Certificate (DSC)
Start by obtaining a Digital Signature Certificate (DSC) for the intended director of the OPC. The DSC is a crucial electronic signature used for electronically signing important documents throughout the registration process.
Step 2: Obtain Director Identification Number (DIN)
Next, acquire a Director Identification Number (DIN) for the proposed director from the Ministry of Corporate Affairs (MCA). The DIN is a unique identifier required for company directors in India.
Step 3: Name Reservation
Apply for name reservation through the MCA portal using Form SPICe+ (Part A). Ensure that the chosen name for your company is distinct and does not resemble any existing company or trademark. This step is essential to secure the desired name for your OPC.
Step 4: Prepare MOA and AOA
Draft the Memorandum of Association (MOA) and Articles of Association (AOA) for your company. These documents define the company’s objectives and internal rules, ensuring clarity and legal compliance.
Step 5: File the Forms
File the necessary forms with the MCA for OPC registration. Attach the relevant documents to the SPICe+ form, including MOA, AOA, declarations, proof of the registered office, nominee appointment, and any other documents required by the MCA. Ensure that all documents are complete and accurate to facilitate a smooth registration process.
Step 6: Certificate of Incorporation
Upon approval by the Registrar of Companies (ROC) and verification of compliance requirements, the ROC will issue a Certificate of Incorporation, signifying the successful registration of your One Person Company (OPC). Notably, the PAN number (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) are generated automatically during the incorporation process, eliminating the need for separate applications.
With this Certificate of Incorporation, your OPC is officially recognized and ready to commence its operations in India.
Why bmcsindia for OPC Registration?
Bmcsindia is the ideal partner for One Person Company (OPC) registration for several compelling reasons. With years of expertise in company registration and a deep understanding of the regulatory landscape, Bmcsindia simplifies the often complex OPC registration process.
We offer expert guidance, from name reservation to document preparation and submission. Our commitment to accuracy and compliance guarantees that your OPC registration adheres to all legal requirements, while our dedicated support team is readily available to address any queries or concerns you may have.
Get started now and embark on your entrepreneurial journey with confidence!
Post-Incorporation Formalities for OPC
Following the successful incorporation of a One Person Company (OPC), specific compliance formalities must be adhered to, similar to those applicable to private limited companies. Our experts are ready to assist you in fulfilling OPC compliance requirements, ensuring that your business remains in full legal compliance.
Udyam Registration can be obtained online to avail various benefits available for small and medium sized businesses. Once the GST registration is obtained, the bmcsindia team would help obtain UDYAM registration by submitting Aadhaar card, PAN card and GST certificate to Government.
Proprietorship vs Limited Liability Partnership (LLP) vs Company
| Features | Proprietorship | Partnership | LLP | Company |
|---|---|---|---|---|
| Definition | Unregistered type of business entity managed by one single person | A formal agreement between two or more parties to manage and operate a business | A Limited Liability Partnership is a hybrid combination having features similar to a partnership firm and liabilities similar to a company. | Registered type of entity with limited liability to the owners and shareholders |
| Ownership | Sole Ownership | Min 2 Partners Max 50 Partners | Designated Partners | Min 2 Shareholders Max 15 Directors Max 200 Shareholders 1 Director 1 Nominee Director |
| Registration Time | 7-9 working days | |||
| Promoter Liability | Unlimited Liability | Limited Liability | ||
| Documentation | Partnership Deed | LLP Deed Incorporation Certificate | ||
| Governance | – | Under Partnership Act | LLP Act, 2008 | Under Companies Act,2013 |
| Transferability | Non Transferable | Transferable if registered under ROF | Transferable | |
| Compliance Requirements | Income tax filing if turnover is more than Rs.2.5 lakhs | ITR 5 | ||
Frequently Asked Questions
BMCS India offers comprehensive business consultancy services, including strategy development, market research and analysis, financial advisory, operational optimization, and organizational transformation. We provide customized solutions to help businesses address challenges and achieve their growth objectives.
BMCS is the top most business management consultant all around the world. Our team of experienced consultants leverages industry knowledge, market insights, and proven methodologies to provide tailored solutions that align with your business goals. Whether you need assistance with market entry, strategic planning, process optimization, or talent management, we collaborate closely with you to understand your unique needs
BMCS India has expertise across various industries, including but not limited to technology, healthcare, manufacturing, retail, finance, and hospitality. Our consultants have worked with diverse clients, enabling us to understand industry-specific challenges and devise strategies that meet your sector's requirements.
To engage our services, you can reach out to us through our contact form, email, or phone. Our team will schedule an initial consultation to discuss your business objectives, challenges, and requirements. Following this consultation, we will provide a tailored proposal outlining the scope of work, deliverables, timeline, and pricing for your approval.
Absolutely! We work with businesses of all sizes, ranging from startups and small enterprises to multinational corporations. Our services are flexible and customizable to meet your specific needs, ensuring that you receive the level of support required to achieve your business objectives, irrespective of your company's size.
At BMCS India, we understand the importance of client confidentiality. We adhere to strict data protection protocols and maintain the highest level of confidentiality. Our consultants sign non-disclosure agreements, and we have robust internal systems in place to safeguard client information. Rest assured, your sensitive data is handled with the utmost care and confidentiality.
Yes, we can help your business expand internationally. Our team has experience and expertise in supporting companies with market entry strategies, feasibility studies, partner identification, and localization strategies in various global markets. We leverage our network of international partners to provide you with valuable insights and guidance throughout the expansion process.
To get started with BMCS India, simply reach out to us through our contact information on our website. We will be glad to schedule an initial consultation to understand your business requirements and discuss how our services can benefit you. From there, we will work together to develop a tailored plan to drive your business success.