Thinking of starting your own venture? But don’t know how to register One Person Company?
This article will help you to register your one person company in 5 easy steps along with it will answer all your queries related to One Person Company.
Before diving deep into one person company registration procedure.
Let’s first understand, what is One Person Company(OPC)?
Let me tell you a story.
Ritika wants to start her fashion business where she can sell her well-designed clothes and wants to operate all her operations all by herself.
In this case, she chooses One Person Company.
You may be thinking why not Sole Proprietorship?
Well, One Person Company is different than Proprietorship.
One Person Company means it consists of an only single member unlike Private Limited Company or LLP where it is required to have minimum two members. The concept of One Person Company started to allow entrepreneurs in starting their own ventures without worrying about partners. The advantages of One Person Company is it has a separate existence from its members that means it offers limited liability protection to the sole shareholder.
The Major disadvantage of registering One Person Company in India is it necessary to convert into Private Limited Company if it crosses the annual turnover of 2 crores and must file an audited financial statement to MCA.
Pro Tip: It is recommended to consider these points before registering One Person Company in India.
Minimum Requirement to register One Person Company
- 1 Member (member refers to someone who subscribes to Memorandum/has their name in the Register of members/holds shares of the company with their name in the records of depository)
- 1 Nominee, who becomes a member of the company in case of death or any other incapacity of the original member.
- 1 Director.
Step by Step Procedure on How to Register One Person Company
To register One Person Company, you need to follow these steps:
How to register one person company
Step 1: Obtain a Digital Signature Certificate (DSC)
The first step is to obtain DSC i.e Digital Signature Certificate for the directors involved in the private limited company. The main purpose of the DSC is to sign the eforms . According to, The Information Technology Act, 2000 has provisions for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is a secure and authentic way to submit a document electronically. DSC is mandatory for all the directors in the company.
How You Can Obtain DSC?
You can obtain DSC by directly approaching Certifying Authorities (CAs) with original supporting documents, and self-attested copies will be sufficient.
Working Days: 1 to 3 Days.
Step 2: Obtain DIN
DIN number is a Unique Identification Number given by the MC. DIN must be obtained for promoter and nominee. No document is required for this step.
Step 3: Filing of MOA & AOA, SPICe INC-32
After registering DSC, You need to verify your company name on MCA Portal -> MCA Services -> Check Company Name
Note: Your Company name should not be registered and should not be taken.
Care should be taken regarding the pre-existing trademark so that name doesn’t get rejected. That’s why It is advisable to check the company name.
If taken, ensure that your company name should not be same as brand name.
next, for name approval there are 2 options:
- Run approval: With run (Reserve Unique Name) approval you can ensure whether the name is available or not. But this method doesn’t allow you to resubmit once it is submitted. In case name gets rejected you can resubmit by paying Rs.1000 for each submission.
- File through SPICe INCE -32 forms: Incorporating a company through Simplified Proforma for Incorporating Company electronically (SPICe -INC-32), with eMoA (INC-33), eAOA (INC-34), is the default option and most companies are required to be incorporated through SPICe only.
In SPICE you will have to submit the PAN & TAN information according to area wise code.
With SPICe INC-32 you can resubmit 2 times.
Working Days: 7 – 9 Days.
Step 4: Pay ROC Fees & Stamp Duty
After filing up the SPICE for, you have to make payment of ROC fees & Stamp duty.
Step 4: Fill Form INC-3 Form
In INC- 3 forms you have to fill Nominee information which includes the information such name, nationality, place of birth, Educational Qualification, Occupation, Residential address information.
Once the INC-3 is filled you need to attach with Spice-32 Form.
Step 5: Issue the Incorporation Certificate:
You will get Incorporation Certificate along with PAN & TAN information and you will also get PAN Number of the company.
Documents Required to register One Person Company
- Address proof of Director and Nominee Director.
- Photo ID proof of Director and Nominee Director.
- Self-declaration about your directorship in other companies.
- Rent agreement of your registered office.
- No objection certificate from the owner.
- Electricity Bill, Property Tax Receipt, Water Bill.
- Bank Statement of 3 months.
- ID proof like Voter ID, Passport, Driving License.
Advantages of One Person Company
- Singe Promoter
One Person Company consist of only one promoter. The promoter can enjoy limited liability protection. One Person Company operate as the separate legal entity so
- Borrowing Capacity
One Person Company can easily raise funds rather than proprietor or partnership firms. However, One Person Company cannot issue different types of equity security, as it can only be owned by one person at all times.
- Uninterrupted Existence
Being a separate entity, the promoter can enjoy its Uninterrupted Existence meaning it is unaffected by the death of any member and continues to remain in existence irrespective of its ownership.
- Less Corporate Formalities
Unlike Private Limited Company, the One Person Company doesn’t require formalities like frequent AGMs/ EGMs, maintaining quorum, minutes, ROC filing formalities etc.
Ownership of a business can be easily transferred
FAQs on How to Register One Person Company
Only Indian Residents can register OPC, that too only one time Ministry of Corporate Affairs.
Who is a Nominee?
Since only one person is the shareholder of the OPC hence, hence at the time of incorporation of a one person company, any other person is nominated as nominee with their consent.
What mandatory requirements needed for an OPC?
Businesses are required to maintain books of accounts, comply with statutory audit requirements and submit income tax returns and annual filings with the ROC.
What is the capital requirement to register One Person Company?
The minimum capital requirement is Rs 1 Lakh and none of this actually needs to be paid-up. That means you don’t need to invest any money into the business.
What Tax Benefits are available in OPC?
Tax is to be paid at a flat rate of 30% on profits, Dividend Distribution Tax applies, as does Minimum Alternate Tax.
Is it mandatory for One Person Company to convert to Private Limited Company?
The MCA is skeptical about a single person in charge of a large corporation. Therefore, it requires all OPCs to be converted into private limited or public limited companies on crossing a certain revenue number. Currently, in case of an average turnover of Rs. 2 crores or more for the three consecutive years or a paid-up capital of over Rs. 50 lakh, the OPC must mandatorily be converted into an OPC.
Yes, Salaried Person can become director only if employment contract allows.
Small businesses who are just starting out, can register sole proprietorship firm because of it’s less cost and least legal compliance requirement. But if your businesses requirement deals with clients where you need to present yourself, then registration of One Person Company is recommended because of its advantages like easy funding, tax benefits, uninterrupted existence described in this article
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