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Learn about One Person Company (OPC) in India—a simple and manageable corporate entity. Combining features of sole proprietorship and corporate structure, OPCs benefit from reduced compliance requirements and an easy, cost-effective registration process under the Companies Act.
5 May 2024
Afinthrive Advisory
OPC Registration opens up new business opportunities for sole proprietors and entrepreneurs who also wish to enjoy the advantages of limited liability, and a separate legal entity as well. OPC does away with the hassles of finding the right partner for starting a business as the registered entity. It requires only one person who will act as a member, shareholder, and director.
Key Points to Remember :
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Plan inclusive of all charges
KEY FEATURES
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Follow these steps to get your OPC up and running smoothly!
The first essential step! Get a Digital Signature Certificate for the proposed director(s) to sign documents digitally with the Registrar of Companies (ROC).
💻 Obtain Digital Signature Certificate (DSC)
Every director needs a unique Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA) to legally serve as a director.
🆔 Obtain Director Identification Number (DIN)
Secure your company’s name! Make sure it aligns with MCA guidelines and isn't already in use or too similar to existing names or trademarks.
🏷️ Name Reservation
Create a roadmap for your OPC! These documents outline your company’s objectives and regulations that govern its operations.
📝 Draft the Memorandum & Articles of Association
Prepare and submit your incorporation forms (including Form INC-32) along with the memorandum and articles of association to the ROC.
📑 File Incorporation Documents
Make the registration official! Pay the necessary fees and stamp duty (if applicable) online through the MCA portal.
💰 Pay Registration Fees
Congrats! Once your documents are verified, the ROC will issue the Certificate of Incorporation, marking the official birth of your OPC.
🎉 Issuance of Certificate of Incorporation
After incorporation, ensure you meet requirements like obtaining PAN, TAN, and GST registration (if applicable).
🔍 Post-Incorporation Compliance
Stay on track! File annual returns and financial statements with the ROC on time to remain compliant.
📅 Annual Compliance
As your business grows, consider converting your OPC to a private limited company or amending your documents for structural changes.
🔄 Conversion & Amendments
This registration is mandatory for Private Limited Companies engaging in taxable supplies of goods or services within 30 days of incorporation. Once registered, the company must collect GST on its sales, file regular tax returns, and comply with GST regulations, helping to ensure legal compliance and seamless business operations.
Filing GST returns involves submitting periodic reports to the tax authorities detailing its sales, purchases, and tax liabilities. These returns typically include bookkeeping, accounting for a Private Limited Company is mandatory and involves several key steps and considerations to accurately record financial transactions, ensure compliance with regulatory requirements, and provide stakeholders with meaningful financial information.
A statutory audit of a Private Limited Company is a mandatory examination of its financial records, conducted by an independent auditor to ensure compliance with statutory requirements and financial reporting standards irrespective of its turnover. The Board of Directors of a Private Limited Company are required by law to appoint an Auditor within 30 days of incorporation and thereafter conduct an audit of its financial statements each financial year.
The requirement for an income tax audit of a Private Limited Company typically arises when the company’s annual turnover or profits exceed certain thresholds specified by tax authorities. Turnover Threshold: If the company’s total turnover from business exceeds INR 1 crore (for financial year 2021-22, subject to change as per amendments). Profit Threshold: If the company’s net profit before tax exceeds 8% of its turnover or INR 6 crores, whichever is higher.
Filing with the Registrar of Companies (ROC) is a mandatory compliance requirement for Private Limited Companies. Forms like AOC-04, MGT 7/7A are required to be submitted compulsorily by the company along with other forms which are filed on meeting certain criteria. Ensuring timely and accurate filing with the ROC is essential for Private Limited Companies to maintain compliance with regulatory requirements and avoid any penalties or legal liabilities.
Trademark registration is a crucial step for protecting a company’s brand identity and intellectual property. While it’s not legally mandatory to register a trademark for a Private Limited Company, doing so offers significant advantages and protections for the company’s brand identity and intellectual property. Registering a Private Limited Company with a name does not provide complete protection to the name or brand name. Ultimate protection for a business name is secured only by Trademark Registration of the same. By trademark registration, you may get the ownership of your Pvt Ltd Co. name or brand name or logo etc.
If a Private Limited Company wishes to engage in import or export activities, it is mandatory to obtain an IEC code. The code serves as a mandatory requirement for customs clearance for goods entering or leaving the country.
The company must maintain statutory registers such as the Register of Members (shareholders), Register of Directors, Register of Charges, etc., and keep them updated.
Here is the check list of documents required.
Get Answers to your most asked questions.
An OPC, or One Person Company, is a type of business entity that allows a single individual to form and operate a company with limited liability. It provides a separate legal identity to the business, enabling the owner to enjoy the benefits of limited liability while retaining full control over the company’s operations.
Any natural person who is an Indian citizen and resident in India can form an OPC. However, certain individuals, such as minors, non-residents, and persons incapacitated by law, are not eligible to form an OPC.
While both OPCs and sole proprietorships are businesses operated by a single individual, the key difference lies in their legal structure and liability. OPCs provide limited liability protection to the owner, whereas sole proprietorships do not offer this protection, and the owner is personally liable for the company’s debts and obligations.
No, there is no minimum capital requirement for forming an OPC in India. The owner can start the company with any amount of capital deemed necessary for the business operations.
Every OPC is required to nominate a nominee director in its memorandum and articles of association. The nominee director is appointed to take over the management of the company in the event of the owner’s death or incapacity. The nominee director must be an Indian citizen and resident in India.
Yes, an OPC can be converted into a private limited company once it meets certain criteria, such as having a paid-up share capital exceeding the prescribed threshold or achieving a certain level of turnover. The conversion process involves filing an application with the Registrar of Companies (ROC) and complying with the relevant regulations.
OPCs are subject to certain compliance requirements, including filing annual returns, financial statements, and other documents with the Registrar of Companies (ROC). They must also maintain proper accounting records and adhere to other statutory obligations prescribed under the Companies Act, 2013.
No, an OPC can have only one director, who is also the sole shareholder of the company. However, the owner can appoint additional directors to the board if the company’s articles of association permit it or if required by law.
Yes, every OPC must have a registered office within India, where all official communications and notices can be sent. The registered office address must be mentioned in the company’s incorporation documents and maintained with the Registrar of Companies (ROC).
OPCs are taxed at the corporate tax rates applicable to other companies. They are subject to income tax on their profits, and dividend distributions to the owner are taxed as per the individual’s tax slab. OPCs may be eligible for certain tax benefits available to small businesses or startups.
A nominee is a person who in the event of death or disability of the subscriber of the One Person Company shall assume his position. Memorandum of Association of a One Person Company will mandatorily prescribe the name of the person.
Yes, a nominee can be changed at any time with due intimation to the Registrar.
No, FDI is not allowed for One Person Company. You may consider incorporating a Private Limited Company if you desire to bring FDI.
Yes, the Act has not made any restriction for a One Person Company to become a member of another Private Limited Company.
