Overview

One Person Company registration is a relatively new concept to public and private limited company registration. Before the implementation of the Companies Act 2013, it was a mandatory requirement that a company must have a minimum of two members; in other words, to form a company, two members were required. After implementing the Companies Act 2013, the concept of One Person Company registration came up in which a single person could incorporate a company, who would also be known as the director and the sole member of the firm. One Person Company, also called OPC, could be easily formed by only one member, unlike a public limited company or private limited company. In this write-up, we will see the One Person Company registration process and the necessary documents required for the incorporation of OPC.

Requirements

The requirements for One Person Company registration are as follows:

• The director should be a natural person.


• OPC in India can only be incorporated by a resident of India.


• The age requirement of the person forming the OPC is 18 years, not less than that.


• The member forming the OPC must not be disqualified under any grounds mentioned in the MCA Companies Act 2013.


• The minimum authorized capital in an OPC must be 1 lakh.


• No person can incorporate OPC to conduct any unlawful activity.


• In an OPC, the threshold limit of the paid-up capital is 50 lakh, and the annual turnover limit is two crores.


• In the Incorporation of an OPC, there must be a Nominee whose approval must be taken in form INC 3.


• The director of the OPC must hold a unique DIN and DSC.


• For the One Person Company registration, there must be a registered office address for the operation of the business.

Characteristics

The essential characteristics of an OPC that distinguishes it from other type of companies are as follows:

• Limited liability of the member : Similar to a public limited company or a private limited company, an OPC also gives the benefit of limited liability to its member. The OPC is treated as a separate legal entity. Members of the company are not liable for any losses the company has faced. In other words, the creditors can sue only the company and not the director.


• Ease of succession : An OPC is eligible for perpetual succession. The nominee selected by the director can handle the company's operations in case of the director's death and take over after the former director.
• Director-shareholder relationship - In an OPC, the director handles the company's day-to-day activities; therefore, the director will be responsible for all the company's responsibilities and act as a company shareholder, the company's only member.


• Holding of assets : As the OPC is a separate legal entity, the company's assets, like the properties, the building, and the machinery, cannot be claimed by any other person, and the One Person Company is also eligible to hold property under its name.


• Compliances : An OPC is subject to various observations like the public and private limited companies. There are annual and half-yearly compliances that the company must fill. Also, the company must ensure incorporation and post-in-corporation compliances.

Advantages Of OPC Company in India

Several advantages of OPC Registration are not available for a public or private limited company. The benefits are stated as follows: -

• Legal Identity : As discussed earlier, an OPC enjoys a separate legal identity protected by its distinct legal status. Even if the company runs into bankruptcy, the member of the company will only be liable for their shareholding, and the creditors cannot sue the member further for the liability of the company.


• Funding opportunity : Like a public limited company and private limited company, an OPC can also quickly receive multiple funding options from angel investors' venture capital because it is nothing different than a private company in terms of status.


• Compliances relaxation : An OPC will not have to prepare the cash flow statement, which is otherwise in the case of a private limited company or public limited company, and the annual reports and account books are optional to be provided by the company's secretary.


• Ease of Incorporation : An OPC can easily be incorporated without much compliance, which is required in the other types of companies.


• Ease of Administration : Administration in an OPC is straightforward because it contains only one member who is also the director of the company; therefore, forming decisions is very easy in an OPC as no vote is required to be passed while taking the findings in the company, resulting in lesser internal conflicts within the company.

Documents required for Registration

For the Incorporation of an OPC, some essential documents need to be submitted for the One Person Company registration. Below is the list of necessary documents:

• Identity proof: Aadhar card, driver's license, or passport.


• PAN card.


• Two copies of color photographs.


• Address proof for the day-to-day business activity.


• In the case of a rented address or a leased property, the NOC from the owner of the property or the building would be required.

Process of Registration

One Person Company registration involves an intensive process that is described below:

• Document filing : The One Person Company registration starts with all the documents mentioned above, which are the essential documents of the member and the registered address proof for the office address. The One Person Company registration process is entirely online; therefore, the company's promoter must digitally sign the documents.


• Selecting a brand name for the company : By the Brand Name, the company is addressed, and therefore, time should be taken to choose an appropriate name for the company that is distinctive, and measures should be taken so that it does not infringe upon other trademarks. The name selection for the companies should also abide by the MCA guidelines, and the ROC should approve the name by filing form SPICE+ (Part A). It should be noted that the name is valid after the reservation by the ROC for 20 days, within which the Incorporation of the company must be done; otherwise, it will expire.


• MoA and AoA of the company : MoA is a memorandum of association, also known as the company's constitution. AoA is the article of association that describes the rules and regulations of the one-person company. These two are the most important documents of a company to be done by experts to ensure that it has a proper format for the objective of the company in a detailed structure. For the MoA and AoA to be effective, they must be signed by the company member and stamped by the notary.


• SPICe+ Application filing : In this step, the application filed for the Incorporation of the company is made after all the documents, MoA, AoA, and the company name are in place. The filing is done in the SPICe+ application form, signed by the director digitally, and has to be certified by the company secretary, chartered accountant, or an experienced advocate.


• Certificate of Incorporation : After all the documents and submissions are verified by the company's registrar and all the records are authentic, the company's registrar will approve the issue of the certificate of incorporation, and the company name will be registered.

Why Adviso?

One Person Company Registration involves requirements, document preparation, and pre-and post-compliance obligations. It is essential to comply with the specific terms of the Company's Articles of Incorporation (MCA). The Incorporation of an OPC can be a tedious process without professional support. That’s where the Adviso comes in. At Adviso, we provide expert services for online company registration on the MCA website. Our Lawyers, CA, and CS experts will be there throughout the journey to ensure your company lists smoothly and efficiently. With Adviso's expertise and assistance, you can easily navigate the complexities of company registration, saving time and ensuring compliance with all necessary regulations.