One-Person Company Registration Hosh February 8, 2025

One Person Company Registration

According to Section 2(62) of the Companies Act, a One Person Company (OPC) is a business entity that has only one individual as its member or shareholder. In other words, it is a company that is owned and run by a single person, who is the sole shareholder of the company. The person who subscribes to the Memorandum of Association (MOA) is considered the sole member of the company.

An OPC is a unique combination of a company and sole proprietorship, providing the benefits of a corporate structure but with the flexibility of being run by a single individual. The concept was introduced to encourage the formation of micro-businesses and to help entrepreneurs realize their business ideas without the complexities that come with a partnership or larger corporate structure.

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Rationale Behind One Person Company (OPC)

  1. Business Transformation: It allows an individual to easily convert a business idea into a formal corporate entity.
  2. Limited Liability: The person’s liability is limited to the amount invested, protecting personal assets from business risks.
  3. Independent Operation: The OPC can be solely operated by the individual, offering complete control over decisions.
  4. No Minimum Paid-Up Capital: Unlike other types of companies, an OPC does not require a minimum paid-up capital.
  5. Perpetual Succession: An OPC enjoys the continuity of existence, as it can continue to exist even after the death or incapacity of the owner.

Major Conditions for Incorporation of One Person Company (OPC) Eligibility of Person Incorporating OPC & Nominee:

  • A natural person.
  • An Indian citizen.
  • A resident of India, meaning the person must have stayed in India for not less than 182 days during the immediately preceding calendar year.

Restriction on Multiple OPCs:

Nominee Conditions:

If a person is already a member of an OPC and becomes a member of another OPC as a nominee, they must make arrangements to comply with the above condition within 180 days.

Other Provisions Related to One Person Company (OPC) Capital Requirements:

An OPC can be started with a minimum authorized capital of Rs. 1 lakh. However, there is no mandatory minimum paid-up capital. The OPC can be started with a contribution as low as Rs. 2. If the paid-up capital exceeds Rs. 50 lakh, the OPC must mandatorily convert into a Private Limited Company.

Conversion into Private Limited Company:

  • If the average turnover of the OPC for three consecutive years exceeds Rs. 2 crore, it must convert into a Private Limited Company.
  • An OPC cannot be incorporated or converted into a Section 8 company (non-profit company under the Companies Act).

Limitations on Activities:

OPC cannot carry out non-banking financial investment activities, including investing in securities of any body corporate.

Voluntary Conversion:

An OPC must convert into a Private or Public Company within 6 months if:

  • The paid-up share capital exceeds Rs. 50 lakh.
  • The average annual turnover for the three consecutive preceding years exceeds Rs. 2 crore.
  • The relevant period refers to the immediately preceding three financial years.

Documents Required for Incorporation of a One Person Company (OPC)

To incorporate a One Person Company (OPC) under the Companies Act, 2013, the following documents are required:

1. Documents for Directors and Members:

  • PAN Card: Self-attested PAN card copies of the member and director.
  • Identity Proof of Directors: Self-attested identity proof of the director(s) (one of the following):
  • Valid Passport
  • Voter ID
  • Aadhar Card
  • Valid Driving License

2. Business Address Proof (for the Registered Office):

Address Proof of Directors: Self-attested address proof of the director(s) (must not be older than 2 months). Acceptable documents

  1. Bank Statement
  2. Electricity Bill
  3. Telephone Bill
  4. Mobile Bill

Passport Size Photos: Two passport-sized coloured photos of the member and director

  • NOC (No Objection Certificate) from the owner of the property where the OPC will be registered (if the business is not owned by the applicant).
  • Property Papers or Title Deed for the property.
  • Utility Bill (such as electricity, mobile, or telephone bill) not older than 2 months as proof of the business address.

Required Information for Incorporation of a One Person Company (OPC)

In addition to the necessary documents, the following details are required to incorporate a One Person Company (OPC):

1. Authorized and Paid-up Share Capital:

Authorized Share Capital: The maximum amount of share capital that the company can raise in the future.Paid-up Share Capital: The amount of capital that has actually been paid by the shareholders for their shares. For OPC, there is no mandatory minimum paid-up capital.

2. Personal Details of Sole Member, Nominee, and Director:

Place of Birth: The place where the member, nominee, and director were born.Duration of Stay: The duration for which the member, nominee, and director have been residing at their current residential address.Occupation: The occupation of the member, nominee, and director (e.g., businessman, professional, etc.).

3. Proposed Object/Business of the Company:

A brief description of the business or the nature of activities the company will engage in. This is required to determine the classification of the company.

4. Educational Qualification of Sole Member, Nominee, and Director:

The educational background of the member, nominee, and director, such as degrees or diplomas held (e.g., Bachelor’s degree, Master’s degree, etc.).

5. Contact Details of Sole Member, Nominee, and Director:

Email IDs: The email addresses for communication.

Contact Numbers: The phone numbers of the member, nominee, and director for official correspondence.

Registration Process for One Person Company (OPC)

The process for registering an OPC in India is streamlined through the SPICe+ (Simplified Proforma for Incorporating a Company Electronically Plus) form, which was introduced by the Ministry of Corporate Affairs (MCA) on February 18, 2020. Below is a step-by-step guide to incorporate an OPC:

1. Acquire Digital Signatures

Obtain digital signatures (DSC) of the proposed member and nominee (if any). This is required to sign documents electronically.

2. Application for Name Reservation

Apply for the name reservation of the company via the SPICe+ service on the MCA portal. The process consists of two parts:

Part A: Used for reserving the company name.

Part B: Used for the incorporation of the company.

Before applying, ensure that the proposed name is available on the MCA portal and not already trademarked. The name will be reserved for 20 days from the date of approval.

3. Filing Part B of SPICe+

Fill out Part B of the SPICe+ form to proceed with the registration. This part includes details about the company, its directors, and the registered office.

Required Attachments for Part B:

  • Consent to act as Director in Form DIR-2.
  • Self-attested PAN copies of all the members, directors, and nominee.
  • Self-attested identity proof (e.g., passport, voter ID, driving license) of all members, directors, and nominee.
  • Bank statement or utility bill (not older than 2 months) of the directors/members.
  • No Objection Certificate (NOC) from the owner of the proposed registered office along with utility bills and ownership proof (municipal tax receipt, sale deed, etc.).
  • Consent of Nominee in Form INC-3.
  • Preparation of MOA (Memorandum of Association) and AOA (Articles of Association) electronically.

4. Convert SPICe+ Form into PDF

Once the SPICe+ form is completed, convert it into a PDF and affix the Digital Signature Certificates (DSC) of the proposed members and directors.

5. Filing AGILE-PRO

Fill out AGILE-PRO (Additional form for GST, EPFO, and ESIC registration). This is required for:

  • Mandatory registration with EPFO (Employees’ Provident Fund Organisation).
  • Mandatory registration with ESIC (Employees’ State Insurance Corporation).
  • Opening a Bank Account.
  • Obtaining the GSTIN (Goods and Services Tax Identification Number).
  • After filling out the AGILE-PRO form, convert it into a PDF and affix the DSC.

6. Upload Forms on MCA Portal

Upload the completed SPICe+ and AGILE-PRO forms on the MCA portal, following the existing process for e-filing.

7. Declaration of Company’s Subscribers and First Directors

The Form INC-9 declaration is automatically generated in PDF format. This declaration must be signed by all the subscribers and first directors of the company and submitted through the electronic form.

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