OPC Registration

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OPC Registration in India

What is OPC registration?

One Person Company in India is a new concept that has been introduced with the Company's Act 2013. One Person Company in India is incorporated by a single person. Before the enforcement of the Companies Act 2013 a single person was not able to establish a company. An OPC has features of a Company and the benefits of the sole proprietorship. Earlier if a person had to establish a business then he or she should only opt for a sole proprietorship.

According to Section 2 (62) of the Company's Act 2013, a company can be formed with just 1 director and 1 member. One Person Company registration in India is a type of entity where there are lesser compliances requirements than that of a Private Limited Company.

A One Person Company Registration in India can be obtained under the Companies Act 2013 with just one single member and one Director. The Director and member can also be the same person. Here an individual who may be a resident or Non-resident Indian can register an OPC in India.

Major reasons for incorporating an OPC in India

What are the benefits of Incorporating an OPC in India?

Status of a separate legal entity: An OPC registration in India receives the status of a separate legal entity. Here the liability of the member is limited to his or her shares and he or she is not personally liable for the losses that are incurring.

Easy to obtain funds: As One Person Company is a separate legal entity it is easy to raise funds through venture capitals, angel investors, incubators, etc. One Person Companies get loans easily than a proprietorship firm. It is very easy to obtain funds.

Fewer Compliances: There are certain exemptions to the OPC when it comes to compliances under the Companies Act, 2013. There is no need for the Company Secretary to sign the books of accounts and annual returns and is to be signed only by the director.

Easy Incorporation: It is easy to incorporate an OPC as only one member and one Nominee are required for the incorporation. The member can be the Director too. For incorporating an OPC in India the minimum paid-up capital required is Rs.1 lakh. Thus, it is easy to incorporate a One Person Company as compared to other forms of the entity.

Easier to manage: The OPCs are easier to manage as they can be established as well as run by one single person. The decision-making is easy and quick. Thus managing a company is easy as there won't be any conflict or delay within the company.

Perpetual succession: A person needs to be appointed as a Nominee. On the death of the member, the nominee will run the company in the member's place.

Documents required for OPC Registration

What are the documents required for OPC registration in India?

To register a One Person Company in India an applicant has to submit the following documents:

PAN Card
Aadhar Card
Photo ( Of Director and Nominee)
Latest Bank statement or any bill that bears the name of the Director or the nominee
Latest Bill for the office address.

Procedure to obtain OPC Registration

How to obtain OPC registration?

Application for DSC: The following documents are required to obtain the Digital Signature Certificate for the proposed Director for which the following documents need to be submitted:

Address proof
Aadhar Card
PAN Card
Photo
Email Id
Phone Number.

Application for the Director Identification Number: Once the DSC is obtained the next step is to apply for the DIN for the proposed Director in SPICe Form along with the name and address proof of the Director. Form DIR 3 is the only option that is available for existing companies. W.E.F from January 2018 the applicant is not required to file Form DIR 3 separately. DIR 3 can be applied within the SPICe Form for up to three Directors.

Name Approval Application: The next step while incorporating an OPC is to decide the name of the Company. The Name of the company can be approved in the SPICe+ 32 application. In case the name gets rejected another name can be submitted by making an application another SPICe+ Form.

Once the name is approved by the MCA we move to the next step to draft the MOA and AOA of the company.

MOA and AOA preparation: The Memorandum of Association and Article of Association are to be submitted to the ROC.

The Memorandum of Association consists of the objectives that are to be followed by the Company. The MOA states the business for which the company is being incorporated.

The Articles of Association lays down the laws on which the company will operate.

As there is only 1 Director and a member a Nominee has to be appointed because in case of incapacitation or death of the promoter the Nominee has to take the place. The consent of the Nominee will be taken along with the PAN and Aadhar card in Form INC 3.

Declaration and Consent of the proposed Director will be taken in Form 9 and DIR 2 respectively.

A declaration by a professional certifying that all the compliances are met.

Filing Forms with MCA: All the documents will be attached in the SPICe Form, The MoA and the AoA will be uploaded on the site for approval.

Issuance of Certificate of Incorporation: On verifying the Registrar of Companies will issue the Incorporation and the business can be commenced.

How to check company name availability?

You can check the availability of company name availability on MCA using IndiaFilings platform.

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One Person Company (OPC) Registration Fees

Pay as you go grow pricing

All Inclusive Pricing - No Hidden Fee

Basic

^₹6899

all inclusive fees

1 Digital Signature - 2 Year Validity ¹
1 Director Identification Numbers
Name Approval ²
Authorised Capital Fee ³
Incorporation Fee
Stamp Duty ⁴
PAN & TAN
LEDGERS Billing Software ⁵
Bank Account Opening
Commencement of Business

Standard

^₹19899

all inclusive fees

1 Digital Signature - 2 Year Validity ¹
1 Director Identification Numbers
Name Approval ²
Authorised Capital Fee ³
Incorporation Fee
Stamp Duty ⁴
PAN & TAN
LEDGERS Billing Software ⁵
Bank Account Opening
Commencement of Business
GST Registration
Auditor Appointment Support
Bookkeeping for 1 Year
Financial Statements & Board Reports
ITR-6 Filing for Company
MCA DIN eKYC for Directors
MGT-7 & AOC-4 Filing

Digital signature from eMudhra with 2 year validity along with ePass 2003 token.
Upto 4 name options can be given in 1 RUN name approval request.
Authorised capital is the amount of shares a company can issue at anytime and can be increased further in the future. Paid-up capital is the amount invested by shareholder and can be even Rs.2.
In case of incorporation in Madhya Pradesh, an additional stamp duty of Rs.7500 will be applicable. In case of incorporation in Punjab, an additional stamp duty of Rs.10, 000 will be applicable. In case of Kerala, an additional stamp duty of Rs.3000 will be applicable.
Premium LEDGERS Accounting Software with GST Portal Integration and eWay Bill Software.
Statutory Auditor fee is payable on actuals directly to the Independent Auditor appointed by the Board of Directors. IndiaFilings will only be responsible for accounting, preparation of financial statements and filing of returns on behalf of the Company.
Additional authorised capital can be purchased if requried at time of incorporation.

Role of Nominee

What is the Role of Nominee in a One Person Company?

A nominee in an OPC is the person designated by the sole promoter of the company to be his successor. In case of death or incapacitation, the Nominee will take over. The nominee must be an Indian Citizen and a resident who is not a minor. While incorporating a One Person Company, a Nominee Consent Form must be filed with the MCA.

Withdrawal of Consent: The Nominee can withdraw his/her consent, in this case, the sole member is required to nominate another member as a legal heir within 15 days of the notice of the withdrawal. The Nomination of the new personnel must be intimated to the company through a written consent in Form INC 3. In turn, the Company 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 in Nominee: The Sole member of the One Person Company can change the Nominee by providing notice in writing to the company. The new nominee must consent to the nomination form in INC 3. The Company must file the notice of the change and the consent of the nominee with the registrar with the applicable fee, within 30 days of receiving the intimation of change.

Nominee Appointment: In case if the nominee becomes in charge of the company due to cessation of the original member's term owing to the death or incapacity of the latter, the new member must appoint a new nominee as a replacement.

Penalty: If a One Person Company or an officer of any such company is not compliant with the mentioned regulations the entity might incur penalties as high as Rs.10,000. Further, for each day of default, the penalty will be increased by a fine of Rs,1000.

Is there any difference between One-Person Company and Sole Proprietorship?

In an OPC a single person can run a company limited by shares and in sole proprietorships, the entity is owned by a person where there is no distinction between the owner and the business. Here is the difference between them:

1

Limited Liability

In an OPC as it is a separate legal entity the liability of the shareholder is limited to unpaid subscription money in his name. On the other hand, the liability of the sole proprietorship is such that any claims made against him will be made against the business.
2

Tax bracket

An OPC can be considered in the same Tax Bracket of taxation as the other private companies because though the OPC is incorporated under the Companies Act,2013 the concept of OPCs does not exist in the tax laws. On the contrary, the Sole proprietorships are required to file the Income-tax returns as the proprietorship and the proprietor are considered to be one under the tax law.
3

Succession

A nominee is appointed by the member. The Nominee will run the Company in the event of death of the member or incapacitation. But in the case of the sole proprietorship, this can only happen by executing a will that may or may not is challenged in a court of law.
4

Compliances

An OPC registered in India has to file annual returns just like a normal company and would also need to get the accounts audited for the same. Whereas the sole proprietorship would only need to get audited under the provisions of Section 44AB of the Income Tax Act,1961 once the turnover crosses the threshold.

Major amendments in the Union Budget of 2021-22

OPC registrations will be allowed to convert into any type of company at any time by being subjected to minimum requirements as prescribed in the Companies Act,2013. The Union Budget 2021-22 has increased the threshold for paid capital to be not more than Rs. 2 crores from earlier Rs.50 lakh and the turnover should not exceed Rs. 20 crore from earlier Rs.2 crores.
According to the previous rules if the paid-up capital or turnover exceeded the mentioned limits in three years then the entity has to be converted into a Private or a Public Limited Company.
The residency limit for the Indian citizens is set up to a One Person Company is now reduced to 120 days from the earlier 182 days.
Non-resident Indians will also be allowed to incorporate Person Companies in India.

Conversion of OPC into a Private Limited Company

An OPC can be converted into a Private Limited Company either voluntarily or mandatory. Take a look at the detailed explanation of both the type of Conversions.

Voluntary Conversion

An OPC can be converted into a Private Limited Company before it satisfies the criteria mentioned below:

A-One Person Company can be converted into a Private Limited

Company after two years from the incorporation
If more than one Director is appointed in a company then a board meeting will be required to convert an OPC into a Private Limited Company.

Mandatory Conversion

Mandatory conversion is required in case a One Person Company meets the parameters mentioned below:

If the paid-up capital of an OPC is beyond Rs. 2 crores.

Thus, in either of the cases, a One Person Company needs to get converted into a Private Limited Company within six months.

The conversion is done by passing a special resolution in the General Meeting. A NOC is required from the creditors and the other members before the resolution are passed.

Documents Required for Conversion of OPC into a Private Limited Company

The directors of the company should be given a declaration by an affidavit that confirms that all the members and directors are have provided their consent for the conversion.

The list of members and the creditors
The recently audited Balance sheets and the profit and loss accounts
A copy of the NOC of secured creditors

Frequently asked questions

What is the role of the nominee in an OPC?

A nominee is an individual who becomes a member of the company in case of the promoter's death or incapacitation.

What is Authorized Capital Fee?

Authorized Capital of a Company is the number of shares a company can issue to the shareholders. A Company is required to pay the Government an authorized capital fee to issue shares.

How to speed up the Incorporation process?

Ensure that the name you choose is unique and you have all the required documents before the process of incorporation for speedy incorporation.

What is a Dormant Company?

If the annual compliances are not met with the becomes a Dormant Company and can be struck off after some time. A Struck company can be revived for a period of up to 20 years.

What is DSC?

The DSC establishes the identity of the sender or the signee electronically while filing the document online.

The MCA mandates that the Directors sign some of the application documents using their Digital Signature.

What is the Director Identification Number?

It is the Unique Identification Number that is assigned to all existing and proposed Directors of a Company.

All proposed Directors must have Director Identification Number.

The DIN never expires and a person can have only one DIN.

Is a Private Limited Company better than an OPC?

OPC is a Company that has a separate existence and is owned by one single member. One person happens to be a mixture of proprietorship and company form of business.

Is Audit compulsory for OPC?

For an OPC statutory audit is mandatory. A company needs to appoint a CA as the auditor of the Company.

The auditor needs to verify the books of accounts and issue a Statutory Audit report.

Is GST mandatory for OPC?

GST registration for a Person Company is necessary if the supply of goods or services is in another state irrespective of annual turnover.

Can OPC raise funds?

An OPC can raise funds through venture capital, financial institutions.

An OPC can also raise funds by converting into a Private Limited Company.

What is the difference between Sole proprietorship and OPC?

In a Person Company, a single person runs a company limited by shares whereas a Sole Proprietorship means an entity that is run by one individual, and the owner and business are considered as the same entity.