A One Person Company gives the benefits of a private limited company despite being run by a single person. The concept of One Person Company Registration Guide was introduced to bridge the gap between a risk-prone proprietorship firm and a limited company. It allows one member to be an owner and a director of the firm, ensuring all-encompassing control over profit and managerial affairs. This One Person Company Registration Guide takes a sneak peek into the legalities concerning the registration process, eligibility, and documentation.
What makes OPC a standout business model?
Before we delve into the One Person Company Registration Guide, let’s explore why OPC is immensely popular in the corporate realm.
- OPC falls under the Companies Act 2013 and adheres to perpetual existence. Often recognized as a hybrid model of a proprietorship firm and a limited company, OPC renders administrable stability with zero risks to the owner’s assets.
- OPC has a distinct legal identity and does not bring unlimited liabilities for the owner. It is an ideal business model for a single owner intending to run business affairs with utmost control and hassle-free decision-making.
- It mitigates the requirement of managing large management or investing large amounts of share capital as a part of establishment compliance, ensuring smooth and hassle-free registration
- Despite being managed by a single owner, OPC brings a host of benefits of a limited company such as minimal compliance, no cap on the owner’s nationality, access to government schemes, nominal taxes, etc. This is unlike the proprietorship model wherein the owner’s assets are at constant risk of being used in events like winding up or debt repayments.
A Quick Glance over the Eligibility Criteria For Registering OPC
- Minimum and Maximum of one member.
- An owner must appoint a nominee before incorporation. The form INC 3 should be used for this purpose.
- The name selection should align with the Companies (Incorporation Rules) 2014.
- Minimum authorised capital of Rs.1 lakh.
- Digital Signature (Class-3) of the proposed director is mandatory as it will used for authenticating the e-documents.
- Paperwork evidencing the ownership or tenancy of the business place.
Paperwork for Forming One Person Company India
The MCA essentially asks for the following documents when it comes to registering OPC in India:
- The Memorandum of Association (MoA) is a founding document boasting a company’s objectives.
- The Articles of the Association (AoA) is a bit more elaborate than the MoA as it entails the company’s by-laws and guidelines.
- Form INC-3 is required to assure that the nominee has been appointed by the owner/director of the form and that the person so appointed is ready to take responsibility.
- Tenancy or ownership documents concerning the business place.
- Declaration and Consent of the proposed Director of Form INC -9 and DIR – 2 respectively.
- A declaration assuring that all norms have been met.
One Person Company Registration Guide: 6 Steps Process
Following is the detailed One Person Company Registration Guide boasting six steps:
Step 1: Apply for DSC
DSC stands for Digital signature and certificate approving documents, including online application forms or documents. For OPC registration, you need to secure class 3 DSC from the agencies recognized by the Ministry of Corporate Affairs, aka MCA. While applying for DSC, the agency might ask you to share the following paperwork.
- Address proof
- Aadhaar card
- PAN card
- Photo
- Email Id
- Phone number
Step 2: Apply for DIN
This step requires you to apply for DIN, which stands for Director Identification Number. It comprises a unique identity code assigned to an individual proposed to be a director in a firm. SPICe+, an incorporation form, can be used to apply for DIN.
Step 3: Name Approval Application
The next step is all about the name selection and reservation. Whatever name you select, it must appear as shown below; ABC is a random company name.
“ABC (OPC) Private Limited”.
SPICe+ application Part A renders the facility of name selection and approval.
You can propose up to three names. Only the legitimate name will get the MCA’s approval, upon which you can address the rest of the formalities available in Part B of the form.
Once you get your name approved, proceed to the next step, which is the paperwork arrangement.
Step 4: Arrange the Documents Required
This is among the most important steps requiring a vigilant approach. While arranging the following documents ensure their accuracy and legitimacy as ROC (The Registrar of the Company) shall examine them rigorously. Refer to the document section above to serve this requirement.
Step 5: Filing of Forms With MCA
Attest all the mandatory paperwork, including SPICe-MOA and SPICe-AOA with the incorporation form and then upload on the MCA portal.
There is no requirement to apply for PAN and TAN as it will be automatically granted by the authority along with the incorporation certificate.
Step 6: Grant of certification
Upon vetting all the paperwork, ROC shall grant the registration certificate, reinforcing that your company is legally eligible to fulfill MOA’s objectives.
Conclusion
One Person Company is an ideal business structure for those seeking to operate in a legalized way with a small to moderately-sized management. The compliance for OPC is not as complicated as a private or public limited company.
It checks every box when it comes to running a legalized business seamlessly. We hope this One Person Company Registration Guide will overcome your incorporation woes by simplifying the entire process.
