One Person Company Registration

One Person Company (OPC) is a type of private limited company with a single director and a single shareholder (who can be called the promoter). This company structure is particularly suitable for entrepreneurs who wish to start a business without compromising their decision-making autonomy and leadership.

Benefits of OPC Registration

Registering as an OPC offers numerous advantages:

• It provides limited liability, shielding the individual from bearing company losses.
• Many provisions regarding meetings and quorum do not apply, such as holding annual general meetings.
• Cash flow statements need not be included in financial statements.
• Directors can receive higher remuneration.
• Annual returns do not require a company secretary’s signature.
• Like a private company, funding can be raised from angel investors, venture capitalists, and incubators.
• Incorporation and management are simplified.

Features of OPC

A One Person Company in India has the following features:

• It can be registered with a single person as the director and shareholder.
• Besides the sole director/shareholder, a nominee is required.
• There is no minimum paid-up share capital requirement.
• OPC is a distinct legal entity similar to a private limited company.
• The shareholder enjoys limited liability.
• Perpetual succession is not guaranteed, as the nominee may opt not to run the business after the shareholder’s demise.

Disadvantages of OPC

Despite its advantages, OPC has some drawbacks:

• Raising capital through the addition of members and shareholders is challenging, limiting growth potential.
• The lack of a clear distinction between ownership and management can lead to poor decision-making.
• OPCs cannot engage in certain activities like non-banking financial investments.

The documents required for OPC registration include:

• Memorandum of Association (MoA)
• Articles of Association (AoA)
• Consent in Form INC-3 from the nominee
• Consent in Form DIR-2 from the proposed director
• Declaration in Form INC-3 from the proposed director
• Proof of registered office (utility bills, rental agreement, NOC from the owner in case of rented property)
• PAN card and Aadhar Card of the Director and nominee

1. Obtain Digital Signature Certificate (DSC): The proposed director must apply for a DSC, essential for digitally signing documents.

2. Obtain Director Identification Number (DIN): Apply for DIN through the MCA portal using the SPICe+ form.

3. Name Reservation: Reserve the company name through Part A of the SPICe+ form.

4. Document Preparation: Prepare necessary documents such as MoA, AoA, nominee, and director consent forms.

5. Submission of Application for Incorporation: Complete Part B of the SPICe+ form with all details and attach required documents.

6. Incorporation: Upon approval by the RoC, receive the Certificate of Incorporation along with PAN and TAN.

Timeline and Fees

• DSC and DIN issuance: 1 day
• Certificate of Incorporation issuance: 3-5 days
• Total process time: approximately 10 days, subject to approval

Fees: ₹2000 for share capital up to ₹10,00,000, with additional fees for higher amounts.

Mandatory Compliance

OPCs must comply with:

• Proper maintenance of books of accounts
• Statutory audit of financial statements
• Conducting at least one Board Meeting every six months
• Annual filing of income tax returns and financial statements

Taxation Rules & Exemption

OPCs are taxed at a flat 25% rate, similar to private limited companies. They are exempt from certain compliance activities involving multiple shareholders, such as AGMs and voting procedures.