06 Sep How to Register a One-Person Company (OPC)?
The new idea of a One Person Company (OPC) was introduced by the Companies Act of 2013. An OPC, as the name suggests, is a business founded by one person. The business is founded and run by a single person. An OPC possesses all the characteristics of a corporation, including perpetual succession, limited liability, and a distinct legal identity.
An OPC is run by one person, however, they are required to nominate another person who will be considered as a successor in the unfortunate event that the person running the OPC is unable to work any more for whatever reason.
A single person could not start a company before the Companies Act of 2013 went into effect. If a person wanted to start a business, they could only choose a sole proprietorship because a company had to have at least two directors and two members to be formed.
What is a One Person Company?
A One Person Company is one that a single person can start. Unlike a private or public limited company, this company only has one member and one director. This is following the Companies Act of 2013 Section 2(62).
A one-person company can be formed with fewer formalities than other kinds of businesses. This involves little hassle. It combines the advantages of a company and a sole proprietor.
Registration Process for a One-Person Company
Though it might seem challenging, registering an OPC is very simple. Let’s examine the procedures for a One-Person Company registration:
Step 1: Apply for DSC
The first step is to obtain the proposed Director’s Digital Signature Certificate (DSC), which calls for the following paperwork:
– Aadhaar Card
– PAN Card
– Passport Size Photo
– Email ID
– Address Proof
– Mobile Number
Step 2: Apply for DIN
Once the Digital Signature Certificate (DSC) has been created, the Director Identification Number (DIN) of the proposed Director ought to be sought in SPICe+ Form along with proof of the Director’s name and address. Only companies with an active DIR-3 filing status are eligible for the option. It indicates that beginning in January 2018, the applicant is exempt from submitting Form DIR-3 separately. Now, up to three directors may apply for DIN using the SPICe+ form.
Step 3: Name Approval Application
The following step in involving an OPC is choosing a company name. “ABC (OPC) Private Limited” will be the name under which the business is known.
The name can be approved in the Form SPICe+ 32 application. Only one preferred name and the justification for keeping it may be listed on the Form SPICe+ 32 application. Submit an alternate name by submitting an additional Form SPICe+ 32 application if the first one is rejected.
Once the name is approved by the MCA, then you may proceed further.
Step 4: Documents Required
Prepare the following documents, which must be submitted to the ROC, next:
– The Memorandum of Association (MoA), outlines the company’s objectives or specifies the line of business for which it will be incorporated.
– The operating rules for the company are outlined in the Articles of Association (AoA).
– Since there is only one Director and one Member, it is necessary to appoint a nominee on their behalf so that, if the Director becomes incapable of performing his or her duties due to incapacity or death, the nominee will act in the Director’s place. Together with his PAN card and Aadhar card, his consent in Form INC – 3 will be collected.
– Evidence of the proposed company’s registered office, ownership documentation, and an owner’s no-objection certificate.
– The proposed Director’s Declaration and Consent on Forms INC-9 and DIR-2, respectively.
– A certification from the expert stating that all compliances have been met.
Step 5: Filing of Forms With MCA
Along with the DSC of the Director and the professional, all of these documents will be uploaded to the MCA site for approval and attached to the SPICe+ Form, SPICe-MOA, and SPICe-AOA. When the Company is incorporated, an automatic process generates the Pan Number and TAN. The PAN Number and TAN do not require separate applications to be submitted.
Step 6: Issue of the Certificate of Incorporation
The Registrar of Companies (ROC) will issue a Certificate of Incorporation after verification, at which point we can start operating.
Checklist For Registering One Person Company in India:
– One member, minimum and maximum.
– An appointed nominee should be made prior to incorporation (The nominee’s consent should be obtained using Form INC-3).
– The Companies (Incorporation Rules) of 2014’s provisions must be followed when choosing the name of the OPC.
– A minimum of Rs. 1 lakh in authorized capital.
– The proposed director’s DSC.
– Evidence of the OPC’s registered office.
Advantages of Considering a One-Person Company
1) Legal Status
The member grants the OPC separate legal entity status. The OPC has a special legal status that protects the only person who incorporated it. Instead of being solely accountable for the company’s loss, the member’s liability is only up to the value of the shares that they personally own. Therefore, rather than the member or director, creditors may assert their rights against the OPC.
2) Simpler Tax Return Filing
While it is required for an OPC to have its accounts audited and submit the necessary annual filings, doing so is simple with the director’s signature; a company secretary’s signature is not required.
3) Market Value
The same benefits that come with a company being classified as a private limited company are also available to one person companies that are established under the Companies Act.
Insider Tip: Once an OPC’s turnover exceeds Rs 2 crore, it must be changed into a Pvt Ltd Company within 6 months.
4) Easy to Manage
The OPC can be founded and run by a single person, making administration simple. Making decisions is easy, and it happens quickly. By stepping into the resolutions in the minutes’ book and obtaining the signature of just one other member, the member can quickly pass both regular and special resolutions. It will be simple to manage the business because there won’t be any interpersonal disputes or delays.
5) Perpetual Succession
Even with just one member, the OPC has the feature of perpetual succession. The single member must designate a nominee when incorporating the OPC. The person selected will take over management of the company in the event that a member passes away.
We hope this article has provided you with answers to your questions about one-person businesses, including one-person company registration, what benefits there are, and other topics.
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