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Tanya Verma
| Updated: 04 Nov, 2019 | Category: One Person Company

A Complete Guide on One Person Company Registration in India

one person company registration

One Person Company Registration process is a very simple and easy process with Corpbiz. An OPC or One Person Company is the newest form of company type introduced in the Companies Act, 2013[1]. It is a form of company that can be formed with just one person. Furthermore, all the requirements for starting an OPC are the least amongst all other company types. The most important fact about an opc is that it overrules the drawbacks of the Sole proprietorship entity type. 

What is a One Person Company Registration?

The model of One Person Company was first introduced in India through the Companies Act, 2013. This step was taken to support entrepreneurs who on their own want to start a business venture by allowing them to form an entity consisting of just one person.

One of the most significant advantages of a One Person Company (OPC) is that there is a requirement of only one member in the company. While on the other hand, a minimum of two members is required for incorporating and maintaining a Private Limited Company, Limited Liability Partnership (LLP) or a  Partnership Firm. Similar to a Company, a One Person Company is a legal entity separate from its promoters, offering limited liability protection to the sole shareholder, while having the continuity of business.

However, if any OPC generates a turnover of Rs. 2 crores or more or acquires a paid-up fund of Rs. Fifty lakhs or more then it has to be converted into a Private Limited Company or a Public Limited Company.

Benefits of One Person Company Registration

One Person Company registration has its own advantages over any other entity type;

  • It has Limited Liability: The directors’ personal property is always safe in a private limited company, no matter the debts of the business.
  • The existence of the entity continues for a long time: Unlike a sole proprietorship firm, the body ceases to exist even after the death of the owner. In an OPC, the company is passed on to the nominee director in such a situation.
  • It has greater credibility: An OPC is more trusted by venders and lending institutions as it is audited annually.

Who is allowed to Opt for One Person Company Registration?

Only Indian residents are allowed to incorporate a One Person Company. Additionally, only one entity is allowed to be set up as specified by the Ministry of Corporate Affairs {MCA}.

Documents Required for One Person Company Registration

You need to prepare the following documents which are required to be submitted to the Registrar of Companies {ROC}:

  • The Memorandum of Association (MoA): It specifies the objects to be followed by a Company and states the type of business for which the company is going to be incorporated.
  • The Articles of the Association (AoA): It lays down the by-laws on which the company is going to operate.
  • Since there are only 1 Director and a member, a nominee on behalf of such a person has to be appointed. This is because in case he becomes incapacitated or dies and cannot perform his duties, the nominee will act his responsibilities on behalf of the director and take his place. The consent in Form INC – 3 need to be submitted along with his PAN card and Aadhar Card.
  • You need to submit a Proof of the registered office (such as a Rent agreement,) along with the evidence of ownership and a NOC of the owner.
  • Also, there is a need to submit the Affidavit and Consent of the proposed Director in Form INC -9 and DIR – 2 respectively.
  • Lastly, a declaration by a professional is required certifying that all compliances have been made.
  • Scanned transcript of Current Bank Account Statement/Phone or Mobile Invoice/Gas or Electricity Invoice)
  • Scanned transcript of Rental Agreement written in the English language
  • Scanned transcript of N-O or No-objection Certificate from the concerned property landowner
  • Scanned transcript of Property or Sale Deed printed in English (if the property is owned)
  • Scanned transcript of Passport (Foreign Nationals & NRIs) or PAN Card
  • Scanned transcript of Passport, Voter’s ID or Driver’s License
  • Scanned transcript of Current Bank Account Statement/Phone or Mobile Invoice/Electricity or Gas Invoice
  • Scanned passport-sized photo
  • Specimen autograph or impression (blank document with autograph)
  • Any other specified document

Read our article:Differences Between OPC (One Person Company) and Private Limited Company

One Person Company Registration Procedure

Follow the given steps to register your One Person Company;

Step 1: Apply for DSC

Step 2: Apply for DIN

Step 3: Get the name of your entity registered through a Name Approval Application, i.e. the Reserve Unique Name {RUN} Form

Step 4: Attach Required Documents

Step 5: Submit the necessary forms with MCA

Step 6: Finally you will receive your Certificate of Incorporation

Disadvantages of forming an OPC

It is true that incorporating an OPC has its own advantages; however, it can hold certain disadvantages also. The drawbacks of forming a One Person Company are as follows;

  • There is a requirement to appoint a nominee for incorporating a One Person Company
  • There is a limitation on who can form an OPC
  • Also, after a specified limit an OPC has to be converted into a bigger entity type
  • One person can only form one OPC

Conclusion

One Person Company is a type of entity best suited for entrepreneurs who can invest less amount of capital at the beginning. Also, OPC is a type of entity which is best suited for MSME Registration, which provides them with the opportunity to partake in major government trade fairs and other schemes, etc. which can help them grow faster.

Read our article: Comparison between OPC and LLP: Advantage of One Person Company

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Tanya Verma

Tanya is working as writer & editor from past 2 years with experience in covering startup and technology related topics.

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