One-Person Company
This is suitable for an entrepreneur who wants to start a business alone.
This is suitable for an entrepreneur who wants to start a business alone. It is a New Concept introduced in the Companies Act 2013. Our Team of Professionals assists you in getting the One Person’s Company Registration.
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Overview
Companies Act 2013 introduced the new concept of One Person Company, enabling a single entrepreneur to enter into a Corporate Framework. Prior to 2013, it was not possible for a single person to establish a company. Thus, it was a great initiative from the government, as it enabled single individuals to start their own companies, without searching for another person.
Section 2(62) of the Companies Act 2013 defines One Person Company as a Company which has only one person as a Promoter member/Shareholder. In the case of OPC, it is mandatory to appoint a “Nominee”, who will become the owner in case of any death or disability of a member.
One Person Company cannot voluntarily convert into any other kind of company unless two years have expired from the date of incorporation except in case its paid-up share capital exceeds 50 lakhs or turnover exceeds 2 Crore.
An Indian or Non-Resident Indian can register an OPC in India.
Benefits Of One Person Company
Limited Liability
In a Limited Liability Partnership (LLP), partners are only liable for debts up to their capital contributions, protecting personal assets. One partner is not accountable for another's actions, unlike in traditional partnerships.
Separate Legal Entity
An LLP Is an artificial person created by law. It is governed under the LLP Act, 2008. Thus, it creates a separate legal identity of itself, from its partners, and provides immunity to the owner’s personal property or assets in case of bankruptcy.
Perpetual Existence
It means that an OPC can continue indefinitely. The continuation of the business will not get affected by the condition of its owners. Thus, it is mandatory to appoint a Nominee at the time of OPC Registration. At the time of death of the existing member, the Nominee becomes a member of an OPC.
Better Accountability
OPC company accounts are easily available at MCA Portal. Anyone can access them and this acts as a transparency to their work and this helps in taking better investment decisions for others. This also helps in raising funds from Private Investors, as they rely on the accounts of the Company.
Documentation For One Person Company
Partners
PAN Card of each Director & Shareholder
Address Proof (Driving License, Passport, Aadhar Card)
Latest Residence Proof (Electricity Bill, Water Bill, Gas Bill, and Bank Statement)
Passport Size Photograph of each Director & Shareholder
Office Premises
Latest Electricity Bill, Gas Bill of Office Premises
NOC from Owner /Rent Agreement
Process
ExploreDigital Signature Certificate (DSC)
1
Persons who will be acting as a director and shareholders of the proposed company, need to apply for DSC. It is required to sign and validate all the documents.
Name Approval
2
Proposed name needs to be approved by ROC. ROC will check the name availability on different parameters and then will issue the approval letter.
Company Incorporation
3
Once the name is approved, the application needs to be made for the formation of the Company in Form Spice+ and the same is verified by a professional CA, CS or CMA.
Drafting of MOA & AOA
4
Along with Spice+, the MOA & AOA of the Company also need to be filed. A Memorandum of Association (MOA) defines the fundamentals of the company and the Articles of Association (AOA) contains the rules & regulations of the Company.
Incorporation Certificate
5
After verification of Spice+, Roc will issue the Certificate of Incorporation. Incorporation Certificate gets issued within 3-4 working days.
PAN & TAN Allotment
6
With a certificate of incorporation pan and tan allotment will be made and a soft copy of pan and tan will be received by mail from the Department.
Opening Bank Current Account
7
After receiving COI and other relevant documents, Private Limited can open the bank’s current account in the name of the Company.
Compliances
COMPARISON WITH OTHER FORMATS TO CHOOSE THE BEST SUITABLE FOR YOUR BUSINESS
LLP vs. Private Limited Company vs. Partnership Firm vs. OPC Company vs. Proprietorship Firm
| Proprietorship Firm | Partnership Firm | Limited Liability Partnership | Private Limited Company | One Person Company | ||
|---|---|---|---|---|---|---|
| Governed by | Not Governed by any specific act | Indian Partnership Act | LLP Act, 2008 | Companies Act, 2013 | Companies Act, 2013 | |
| Recommended | Sole Promoter | Small Business | Small Business | Start-ups and growing business | Sole Promoter | |
| Registration | NA | Optional | Mandatory | Mandatory | Mandatory | |
| Members Liability | Unlimited | Unlimited | Limited | Limited | Limited | |
| Separate Legal Entity | No | No | Yes | Yes | Yes | |
| Number of Members | Only 1 | 2 – 50 | 2 – Unlimited | 2 – 200 | Only 1 | |
| Transferability | Non-Transferable | Non-Transferable | Transferable, if ROF registered | Transferable | Transferable | |
| Compliance | Low | Low | Moderate | High | High | |
| Statutory Audit | No | No | Based on Turnover | Applicable | Applicable | |
| Taxability | Low | High | High | Moderate | Moderate |
Any Questions? Answered
Our FAQ section addresses common inquiries to help you find the information you need quickly. If you have further questions, feel free to reach out!
Is it necessary to appoint a Nominee in OPC?
Appointment of Nominee is compulsory, as in the event of the death or incapacitation of the promoter, the Nominee becomes a member of the company, by default.
Which is the most suitable format, Private Limited Company or OPC?
Both of the above formats of business is the same, the main difference between the 2 is Pvt Ltd Company gets formed by 2 or more person, whereas to form an OPC, only one person is required. Thus, any single person who wants to form a company can incorporate an OPC.
What all Compliances are mandatory for OPC?
Being a One Person Company, it enjoys various Compliance Exemptions from the Companies Act 2013, like, as it is not required to hold an AGM yearly, and only 2 Board Meetings are required to be held in a year.
OPC Can be converted into a Private Limited Company?
Mandatory Conversion arises, when the yearly turnover of the previous three consecutive years, crosses the threshold of 2 crores or when Paid up Share Capital exceeds Rs. 50 Lakhs. Voluntary Conversion can be done, upon completion of 2 years from the incorporation date of OPC.
Can an NRI become a Nominee in an OPC?
Yes, as per the Companies Act 2013, a Nominee can be a Non-Indian Resident, with having minimum age of 18 years. Also, at the time of the Formation of an OPC, the Consent of the Nominee is required.
Can an OPC raise funds?
OPC cannot raise funds from General Public, however, it can raise the funds from Private Investors like Angel Investors, Venture Capitalists and financial Institution via Debt Funding.