One Person Company

ONE PERSON COMPANY(OPC):

Description: One-person company has the blended features of sole proprietorship and a private company. Like a sole proprietorship allows you to own the firm completely, an OPC also has just one shareholder. There should a nominee in the one-person company.

Benefits of OPC:

• Easy Incorporation: Under One Person Company, a single person can start a business with very little compliance. For the incorporation of OPC, only one member and one nominee are required. No paid-up capital is required for its incorporation.
• Complete Control by The Individual: Since it is a single-person company, so the complete control remains in the hand of one person only. The decision-making becomes easy and quick as there will be no conflicting opinions, so the running and management of the Company will be easy.
• Easy Compliance and Tax Flexibility: The Companies Act, 2013 provides limited or lesser compliance to One Person Company. Less compliance means less paper, and it also takes less time to carry out such lesser compliance. The OPC need not show the cash flow and avails the benefit of tax availability too. Only the Director has to account book and annual returns.
• Benefits for Small Scale Industries: One Person Company avails the benefits provided to small-scale industries like easy funding, less compliance, loans at a lower interest rate, etc.
• Ease in Funding: The OPC can take its funds through financial institutions, capital ventures, and other investors. To bring up its funds from outside, the OPC can upgrade itself into a private company.
• Least Requirements for Registration: In the process of registration of One Person Company, the requirements are very less in comparison to the registration of other types of companies.
• Significant Growth: The One Person Company is completely based on the sole ownership of the Company and a Centralised Management System that pushes the Company towards achieving significant growth and a bigger contribution to our country’s economy.
• Greater Credibility: As OPC is owned by a single person so its accounts are audited annually, and thus it has greater credibility.
• Income Tax Benefits: If your company is unique and has the potential to create larger employment opportunities, then you can register your OPC under the Start-up India scheme of the Government and take the Income Tax benefit for at least five years.
• Sole Business Ownership: Sole ownership provides stability in business since there will be no possibility of conflict of interest among the shareholder group because only one member is running the whole business.
• Increased Transparency: Another benefit of One Person Company is increased transparency while dealing with government authorities. The transparency can be seen on both ends, i.e., the Government and the applicant.
• Beneficial to Sectors Like MSME and SME: OPC is beneficial to some specific sectors such as MSME and MSE. Businesses in rural areas are prevailing because of MSMEs and SMEs, so by OPC, these services can be enhanced. As one-person company needs financial help from public sector undertakings and institutions, the limited liability can save the OPC from any debt. OPC incorporation can positively impact the reputation and growth of MSMEs and SMEs.

Documents Needed:

• Copy of PAN Card of owner.
• Passport size photograph of the owner.
• Copy of Aadhaar Card/ Voter identity card.
• Copy of Rent agreement (If rented property)
• Electricity/ Water bill (Business Place)
• Copy of Property papers (If owned property)
• Landlord NOC (Format will be provided).

Eligibility guidelines for OPC Registration:

• Only a person who is a citizen of India and resident in India. Resident in India refers to a person who had lived in India for a time not less than 182 days in the preceding one year
• Legal entities like company or LLP cannot join an OPC.
• A nominee must be selected by the promoter while the incorporation.
• An OPC is restrained from operating a minor as its member.
• Least 1 Shareholder/Nominee/Directors
• If an OPC crosses a turnover of over Rs 2 crores or has a paid-up capital more than Rs 50 lakhs. It must be converted into a private or public within 6 months.
• The least authorized capital must be Rs 1 Lakh.

Registration Process:

• Apply for DSC: For registration, it is required for the applicant to get a Digital Signature Certificate (DSC) issued by the Certifying Authority.
• Apply for DIN: Director Identification Number (DIN) is for the proposed Director. The DIN is applied in the SPICe Form along with the details of the Director.
• Name Approval Application: The name selected for the company should be approved, the name of the Company will be in the form of XYZ (OPC) Private Limited.
• Incorporation of One Person Company: Within twenty days from the date of approval of RUN, i.e., approval of name form SPICe shall be filed for incorporation of OPC. All the requisite documents shall be attached with the form SPICe and will be uploaded on the MCA portal. The PAN and TAN will automatically generate at the time of incorporation.
• Obtaining A Certificate of Incorporation: The Registrar of Companies will issue a COI, i.e. Certificate of Incorporation if he finds the information along with the documents appropriate.

Simple and Transparent Services after Registration:

• BASIC: 2 DSC, 1 DIN, 1 RUN Approval Name, 1L Authorised Share Capital, Incorporation Fee and Stamp Duty, Incorporation Certificate, PAN and TAN.
• STANDARD: 2 DSC, 1 DIN, 1 RUN Name, 10L Authorized Capital Incorporation Fee and Stamp Duty, Incorporation Certificate, PAN, TAN, Incorporation Kit, Share Certificates and GST Registration.
• PREMIUM: 2 DSC, 1 Din, 1 RUN Name, 10L Authorized Capital, Incorporation Fee and Stamp Duty, Incorporation Certificate, PAN, TAN, Incorporation Kit, Share Certificates, GST Registration, Udyog AADHAR & Trademark Registration.

Registration Duration: The Certificate of Incorporation of an OPC is obtained in 3-5 days. The whole incorporation process of an OPC takes approximately 10 days or depending upon the time of registration.