OPC Registration Procedure

How to Register a One Person Company (OPC)

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How to Register a One Person Company (OPC)

A person as a single promoter can incorporate a Company and have the benefit of limited liability and separate legal entity of a Company. With a OPC, there is no requirement for a Partner or Co-Founder. In this article, we look at the procedure for incorporation of a One Person Company in detail.

Click here to register a one person company through IndiaFilings.

Formation of Company

Before exploring the concept of a one person company, let us have a brief understanding of the various types of companies that can be formed. A company can be established for a lawful purpose by the following number of persons:

  • Seven or more persons, in case of a public limited company.
  • Two or more persons, in case of a private limited company.
  • One person, in case of a one-person company.

Know more about company registration process in 2018.

One Person Company Incorporation Eligibility

Unlike a private limited company, a one person company has certain restrictions associated with its incorporation. Hence, before starting a OPC registration, its important to understand the constraints and ensure the promoter is eligible as per Companies Act to register a OPC.

    • Only a natural person who is Indian Citizen and resident in India can incorporate OPC.
      • Resident in India means a person who had resided in India for a period not lesser than 182 days in the prior calendar year.
    • Legal entities like company or LLP cannot incorporate a OPC.
    • Minimum authorised capital is Rs 1,00,000.
    • A nominee must be appointed by the promoter during incorporation. 
    • Businesses involved in financial activities cannot be incorporated as a OPC.
    • OPC must be converted to a private limited company when it’s paid up share capital is in excess of 50 lakhs and turnover is in excess of 2 crores.

Thus, a one-person company can be formed by an Indian citizen who has his/her presence in India for at-least 182 days during the immediately preceding calendar year. A person can incorporate not more than one OPC. Finally, an OPC is prohibited from holding a minor as its member.

Nominee in One Person Company

The rules for incorporation of one person company requires that the sole member of a One Person Company should include the name of a nominee in the company’s MOA, who will undertake the entity after the expiry or incapacity of the former. Moreover, the document must contain the written consent of the nominee, which must also be filed with the Registrar during incorporation along with the MOA and AOA.

Withdrawal of Consent

The nominee is entitled to withdraw his/her consent, in which case the sole member is required to nominate another member as a legal heir within 15 days of the notice of withdrawal. The nomination of new personnel must be intimated to the Company through a  written consent in Form INC-3. The company, in turn, is required to file the notice of withdrawal of consent along with the intimation of the new nominee with the Registrar in Form INC 4.

Change of Nominee

The sole member of a ‘One Person Company’ is empowered to change the nominee of the company for any reason whatsoever, by providing a notice in writing to the company. Again, the new nominee must consent to the nomination in Form INC 3, and the company must file the notice of change and consent of the nominee with the Registrar along with the applicable fee, within 30 days of receiving the intimation of change.

Nominee Appointment

If a nominee becomes in-charge of the one person company due to the cessation of the original member’s term owing to the death or incapacity of the latter, the new member must appoint a nominee as a replacement.

Penalty

If a One Person Company or an officer of such company is not compliant with the specified regulations, the entity or the officer will incur penalties which could be as high as Rs 10,000. Further, the penalty will be increased by a fine of Rs 1,000 for each day of default.

Incorporation Process

The process for incorporation of a OPC can be divided into four steps as under:DS

  • Obtaining Digital Signature
  • Obtaining DIN
  • Obtaining Name Reservation
  • Incorporation Filing

Obtaining Digital Signature

Digital signature certificate must be obtained for the sole promoter and the nominee for processing the incorporation. Application for DSC would require passport size photos of the applicant, identity proof and address proof.

Obtaining Director Identification Number

Once Digital Signature is obtained, DIN must be obtained for the promoter and nominee. No additional documents would be required at this steps.

Name Availability

Once the Digital Signature is obtained, application for name reservation can be submitted to the MCA. Upto six name options can be submitted and name applications are processed by the MCA in 24-72 hours. The name suggested must conform to the naming standards and the name of the OPC must end or include the words (OPC).

Check company name availability.

Incorporation

After obtaining name approval, incorporation application can be filed to the MCA with signed Memorandum of Association (MOA) and Articles of Association (AOA). Further, the identity proof, address proof and residence proof of the member and nominee would be required. In addition to the MOA, AOA, identity proof, address proof, other incorporation documents like affidavits and declaration of the sole promoter must be submitted. Further, the consent of the nominee director must also be attached in Form INC-3.

On filing for incorporation, approval is granted by the Registrar of Companies (ROC). In case there are any issues with the documents submitted, the application for incorporation can be resubmitted.  

Post Incorporation Formalities for OPC

The compliance formalities for a OPC is similar to that of a private limited company. In case notice of situation related to registered office was not filed during incorporation, it must be filed after incorporation within 30 days. Documents required for filing INC-22 are:

  • Lease deed or Rent agreement together with rent receipts.
  • Copies of utility bills as described above that are not older than 2 months
  • A proof that the Company is allowed to use the address as the registered office of the Company if the same is owned by any other entity or Person and is not taken on lease by company

Click here to read our detailed guide on OPC compliance requirements.

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