One Person Company Registration

The 2013 Companies Act introduces a new type of entity to the existing list i.e., apart from forming a public limited or private limited company, the 2013 Act enables the formation of a new entity, a ‘One Person Company (OPC)’.

Selection of the type of business entity is of utmost importance before starting a business. It is beneficial for entrepreneurs to have multiple options available when looking to start a business. OPC, LLP, and Private Limited Company are the three most preferred business entities in India. LLP is formed under LLP Act, 2008. In LLP, the liability of the partners is limited to their contributed amount to the company. LLP works best if no external funding is required by the partners, when they need it then the company can be turned into a Pvt Ltd Company.

In a nutshell, GST is an indirect tax that is levied on the sale, manufacture, and consumption of goods and services. It applies to the entire nation and seeks to make it a common unified market. With the support of a uniform tax structure, GST will enable smooth supply across the whole supply chain in all states.

An OPC means a company with only one person as its member [Section 3(1) of 2013 Companies Act]. As the name suggests, a One-Person company is a company that can be constituted by just one person as its shareholder. An OPC can be contrasted with Private companies, which require a minimum of 2 members to get going. In OPC, the person and the company are considered separate legal entities. In a One-Person-Company, the owner’s liability is limited to his/her investment.

The introduction of OPC was based on the suggestions of the J.J Irani Committee Report on Company Law, which submitted its recommendations in 2005. It said small companies would contribute immensely to India’s economy, but because of their size, they can not be burdened with equal levels of norms & compliance requirements as big public listed companies.

The Law on One Person Company that took shape, as a result, exempted such companies from many procedural requirements, and, in some cases provided relaxations. For instance, an OPC is not required to conduct an annual general meeting, which is a requirement for other companies.

A One-Person-Company also does not require the signatures of both its company secretary and director on its annual returns.

Online company registration In India, One Person company is most recommended for Single founder, if do not have second director, start the OPC now, its very easy to convert OPC to Private Limited Company. One advantage of One Person company is, limited liability for the directors and Shareholders with certain restrictions that are placed on the ownership.

One person company(OPC) has all the benefits of Private Limited Company. All companies Registered in India are governed by Statutory act, Companies Act 2013.

REQUIREMENTS TO FORM AN OPC

Particulars	OPC
Applicable law	Companies Act, 2013
Regulatory Authority	Ministry of Corporate Affairs
Members required	Minimum one Maximum one
Directors required	Minimum one Maximum 15
Minimum Share Capital	No minimum share capital is required. If capital exceeds 50 lakhs, OPC gets converted into Pvt. Ltd.
Board Meeting	One meeting in each half-year, and the gap between 2 meetings should be at least 90 days.
Statutory Audit	Compulsory
Liability	Limited
Transferability	Ownership can be transferred to the nominee in case of the Director’s death or incapacity to act.
Annual Filing	Financial statements and annual returns to be filed with ROC.
Annual Filing	Financial statements and annual returns to be filed with ROC.
FDI	Not eligible for FDI
To be opted	If Capital requirement is 50 lakhs and turnover less than 2 crores.
Company name	Should end with OPC (Pvt. Ltd.)/ OPC Ltd.

Documents Required for One Person company Registration in India

For Designated Directors

• Pan Card
• Aadhaar Card
• Bank Statement

For Registered Office premises

• Latest Electricity Bill
• No Objection Certificate from the Premises Owner
• Notarize rental agreement in English [or]
• Sale deed/Registery if property is you own the property

Document required

Documents Required

A Certificate of Incorporation serves as a confirmation of a company's formation. Pan card of Company ID Proof: PAN card Address Proof: Ration card/ Aadhar Card/ Driving License/Voter ID 2 Passport-sized photographs of Directors Address proof of the place of business- any utility bill such as water/electricity/telephone/gas bill No Objection Certificate from the premises owner Notarized rental agreement in English (if rented property) Copy of property papers(if own property) A bank account statement that includes name, address, and a few transactions Digital signature for authorized signatory

Steps for registration of an OPC

• Check all the required documents properly
• Apply for DSC and DIN of all the directors
• Apply for the availability of Company name
• File Spice+ form for incorporating the Company
• Apply for PAN and TAN of the Company
• ROC issues a certificate with PAN and TAN
• Open a current bank account under the Company name
• Start Operations

Process and Steps in Registration of One Person Company in India

• 1

  Issuance of Digital Signature certificate(DSC)

  Take 1 working Day

  Digital Signature certificate would be issued for you.

• 2

  Director Identification Number

  Take 1 working day

  Director Identification Number is 8 digit unique identification number issues to directors by MCA(Ministry of Corporate affair).

• 3

  Name Reservation and Approval

  Take up to 4 days

  Once DIN and DSC is there, Filing Karo ComplianceServices professionals will run name availability check on the 2 names provided by you and will file for name approval in MCA(Ministry of Corporate affair).

• 4

  File For Incorporation One Person Company Registration

  Take up to 7 days

  Filing Karo experts will Draft MOA and AOA in consultation with you and incorporate your suggestions, once MOA and AOA is in place, Expert will fill Form in SPICe for the formation of the company. Along side the PAN and TAN would be Filled.

OPC compliance checklist:

Particulars	Description
Corporate stationary	Name Board: All companies including an OPC are required to paint or affix the name of the company and address of its registered office outside every office or place in which it carries its business.
Company rubber stamp	A rubber stamp bearing name of the company along with the designation of the authorized signatory. This is required for executing various legal documents
Letterhead	The name and registered office address of OPC must be printed on all letterhead, notices, invoices, and other official documents of the company.
Form INC 20A	Form after incorporation of business within initial 180 days.
Board meeting	Meetings to be held in each half of the year with a minimum gap between 2 meetings being at least 90 days.
Annual general meeting	OPC is exempted from conducting AGM
Appointment of Auditor	An Auditor must be appointed by the director of OPC for auditing of financial statements of the company
Annual return	An OPC shall file its annual return within 60 days of entry of ordinary resolution in the minute book.
Opening OPC Bank Account	Useful for issuing share certificates, also for the application for an export-import license one would require a current account under the company’s name.
Annual Filing	Financial statements and annual returns to be filed with ROC.
Allotment of securities	Post incorporation, share certificates need to be issued evidencing ownership of the company.Every share certificate must be duly signed by the director or authorized person and have the impression of the common seal of the company.

ROLE OF NOMINEE IN ONE PERSON COMPANY:

During the incorporation of a one-person company, the sole director and shareholder must propose a person as their nominee. A nominee is a person designated as the successor of the company in case of death or incapacity of the sole promoter. The nominee should give written consent to act as a Nominee. The nominee of an OPC must be an Indian citizen and Indian national above the age of 18 years.

CONVERSION OF OPC INTO A PRIVATE LIMITED COMPANY

An OPC can be converted into a Private Limited Company as per Section 18 of the Companies Act,2013 and the provisions of Companies Incorporation Rules of 2014. This conversion will not affect the existing liabilities, current debts, obligations, or contracts of the OPC.

As per section 18 of the Companies Act, 2013 read with Section 122 of the Act, for the Conversion of OPC into Pvt. Ltd. Company, necessary alteration is required in;

• The Memorandum of Association(MOA)
• Articles of Association(AOA), also
• Min. 2 directors & 2 members are required
• Need to fill e-form INC-6, to the concerned ROC along with following documents;
  • Altered MOA & AOA
  • List of proposed members & directors along with consent
  • List of creditors
  • Copy of special resolution
  • Latest audited balance sheet and Profit & loss account
  • Copy of NOC of every creditor with the application of conversion
  • Nominee consent
  • PAN card copy of nominee & member
  • Identity Proof of nominee & member
  • Address Proof of nominee & member
  • ROC scrutinizes the documents & issues the certificate of conversion

There are two ways of converting OPC into Pvt. Ltd. Company i.e.,

1: Voluntary Conversion:

Voluntary conversion of OPC into a Pvt. Ltd. Company is not permitted unless 2 years have expired from the expiration date of OPC. If the paid-up share capital exceeds 50 Lakh rupees or its average turnover exceeds Rs. 2 crores, then the OPC can be converted into a Pvt. Ltd. Company within 2 months.

For converting OPC into a Pvt. Ltd. company, it needs to have 2 directors and 2 members Within 60 days of voluntary conversion, Form INC 5 must be submitted to ROC

Compulsory/ Mandatory conversion:

When a One Person Company has paid-up capital more than or equal to Rs. 50 lakhs or the annual turnover for the given financial year exceeds Rs. 2 crores, then in such conditions, the company has to compulsorily convert itself into a Private Limited Company or Public Limited Company as per the Rule 7(4) of the Companies (Incorporation) Rules,2014.

For this, OPC needs to pass a special resolution in its annual general meeting. Prior to passing this resolution, the company needs to obtain a No Objection Certificate (NOC) in writing from its members and creditors.

The company is also required to file a copy of the special resolution with the ROC within 30 days from the date of passing such resolution in form no. MGT-14.

The Company is required to file an application in form no. INC-6 for its conversion into Pvt. Ltd. Company along with the fees as given in Companies (Registration Offices and Fees) Rules, 2014.

Difference between OPC and Pvt. Ltd. Company:

Particulars	OPC	Pvt. Ltd. Company
Recommended For	Sole promoters	Start-ups and growing companies
Eligibility	Only Indian citizen & Indian resident can apply	Any individual be it NRI or Indian citizen can form it.
Min. requirement	Min. Director-1 Min. Member-1 Nominee -1	Min. directors-2 Min. members -2
Conversion policy	Cannot be converted before 2 years	Can be converted into LLP
Compliance	Not required to conduct Annual General meeting Annual return filing, Not required to conduct board . meetings, if there is only 1 director,	Required to conduct Annual General meeting Required to conduct Board meeting Annual return filing is mandatory
Statutory Audit	Compulsory	Compulsory
Foreign investment	Not allowed	Allowed