One Person Company Registration
To opt for a business format like One Person Company is a refinement option in business a sole proprietor. By forming a One Person Company, a single promoter of business gains full authority and the opportunity to run his own business single-handedly.
One person company apart from its owner is a separate legal entity having limited liability. It permits the entrepreneur to start his own business just like a private limited structure without requiring any co-investor or managing board. The concept of incorporation of One Person Company was brought forward by MCA (“Ministry of Corporate Affairs”) through Section 2(62) in the Companies Act, 2013 (known as “The Act”).
Just like a public limited company, all compliances related to a One Person Company are to be fulfilled with ROC.
The below post will give you a complete understanding of One Person Company Registration in India.
One Person Company Registration
Section 2(62) of the Companies Act, 2013 specifies for the creation of a company which is owned by a single person, in which he can be appointed both directions as well as a shareholder. While the act limits the maximum number of directors in a One Person Company to 15, but no additions can be made to the shareholding of the company.
Some features to know before opting for One Person Company Registration:
- The company can only be registered in India by any one person as a shareholder of the company, The appointment of directors can be done up to a maximum of 15 in number while only a single shareholder is permitted to who owns the decision making power of the company as a member.
- The person incorporating One Person Company should be a resident of India. Out of all directors, one should be the resident of India and should be staying in India for at least 182 days in the preceding financial year.
- Incorporation of One Person Company does not require any minimum capital requirement to be invested in the business.
- The liability of the member of One Person Company is limited to the extent of the capital contribution made to the company.
- One person company registered in India is a separate entity which implies that it does not place any liability on the shareholders or directors more than liable as agreed at the time of incorporation as a subscriber for payment of its debts.
- OPC can also acquire property in its own name.
- The business continues to exist even on the death of the proprietor as the business passes on to the nominee through the transfer of shares.
How to Proceed for One Person Company Registration in India?
Details & Documents Required :
- Pan Card/ Voter Id/Driving Licence/ Passport Size Photos of the Promoter and Members
- Bank Statement of Promoter and Members
- Address proof stating whether self-owned or rented business premises
- No Objection Certificate (NOC)
- Sale Deed or Property Deed of the Registered Office
One Person Company Registration Process
The Act has simplified One Person Company Registration through a single incorporation form Spice plus (Spice +). If you want to start your own One Person Company it is recommended that you go through a business incorporation expert, while the basic procedure for incorporation has been stated below:
- Apply for DSC for directors and owner :
The first step in the incorporation process involves obtaining a Digital Signature Certificate for the directors and members proposed to hold membership in One Person Company.
To Apply DSC, talk to our business incorporation expert at firstname.lastname@example.org
- Apply for a DIN for Directors:
The second step is obtaining a Director Identification Number (“DIN” ) for the proposed directors, which will be allocated to the directors once all details are provided in the Spice Plus incorporation form.
- Preparation of e-MOA/e-AOA:
For obtaining incorporation certificate an MOA (Memorandum of Association) and AOA (Article of Association) have to be prepared with consent of all proposed directors and members of the company..
- Filing of incorporation form with MCA:
To simplify incorporation of One Person Company, MCA has proposed a single standalone FORM SPICE +, which is to be filed with all information of the company including the proposed company name, address, details about members, minimum authorized capital, paid-up capital, the purpose of business, etc. On submission of the form, approval to all required documents for incorporation of One Person Company would be granted by the Registrar Of Company (“ROC”), if there is any discrepancy the application has to be re-submitted with the registrar.
On successful incorporation with Spice plus, an incorporation certificate is provided to the promoter of One Person Company. Also, DIN to the proposed directors is allotted with registration.
The incorporation certificate can further be used for the opening of business bank accounts or to make other necessary registrations.
Note: In case the company, requires some mandatory registration like GST, EPF, ESIC, all will be granted with the same incorporation form Spice Plus.
Benefits of One Person Company Registration
- The liability of the directors and the shareholders is limited to the extent of capital contributed in the business. It limits risk-taking on business owners.
- The company continues to exist without getting affected by removal, entry, death bankruptcy or insolvency of any director or shareholder.
- OPC brings more investment avenues for a sole proprietor which can be raised by issuing bonds, debentures or another form of securities excluding shares.
- OPC as compared to a private limited or public limited, even with extending features of both benefits the promoter with the least number of legal compliances.
Some Restrictions on One Person Company
- No person can form more than One Person Company in India.
- The minimum authorized capital to start One Person Company in India is Rs 1,00,000, while there is no minimum limit over paid-up capital.
- A minor cannot be appointed as an operating member of OPC.
- Any legal entity like a company or LLP cannot join OPC.
- The OPC with turnover exceeding Rs 2 crores or has a paid-up capital more than Rs 50 lakhs must have to be converted to a private or public limited within 6 months.
For One Person Company Registration, email us at email@example.com
Also Read: Aspect of Advance Tax – Provisions, Applicability and Computation