One Person Company

One Person Company (OPC) Registration

The concept of One Person Company in India was introduced through the Companies Act, 2013 to support entrepreneurs who on their own are capable of starting a venture by allowing them to create a single person economic entity. One of the biggest advantages of a One Person Company (OPC) is that there can be only one member in a OPC, while a minimum of two members are required for incorporating and maintaining a Private Limited Company or a Limited Liability Partnership (LLP). Similar to a Company, a One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder, while having continuity of business and being easy to incorporate.

Though a One Person Company allows a lone Entrepreneur to operate a corporate entity with limited liability protection, a OPC does have a few limitations. For instance, every One Person Company (OPC) must nominate a nominee Director in the MOA and AOA of the company – who will become the owner of the OPC in case the sole Director is disabled. Also, a One Person Company must be converted into a Private Limited Company if it crosses an annual turnover of Rs.2 crores and must file audited financial statements with the Ministry of Corporate Affairs at the end of each Financial Year like all types of Companies. Therefore, it is important for the Entrepreneur to carefully consider the features of a One Person Company prior to incorporation.

FCPA is the market leader in company registration services in India, offering a variety of company registration like private limited company registration, one person company registration, Nidhi Company Registration, Section 8 Company Registration, Producer Company Registration and Indian Subsidiary registration. The average time taken to complete a one person company registration is about 10 – 15 working days, subject to government processing time and client document submission. Get a free consultation for one person company registration and business setup in India by scheduling an appointment with an FCPA Advisor.

Reasons to Register a One Person Company

One Person Company is the only type of corporate entity that can be started and operated by a single promoter with limited liability protection in India. A corporate form of legal entity in One Person Company ensures that the business has perpertual existence and easy ownership transferability.

A company has ‘perpetual succession’, meaning uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership.

Ownership of a business can be easily transferred in a company by transferring shares. The signing, filing and transfer of share transfer form and share certificates is sufficient to transfer ownership of a company.In a one person company by altering the shareholding.

Banks and Financial Institutions prefer to provide funding to a company rather than partnership firms or proprietary concerns. However, a one person company cannot issue different types of equity security, as it can only be owned by one person.

Bank account can be opened in the name of a Partnership firm. To open bank account, the partnership deed copy and KYC documents of the Partner must be submitted along with any other document as required by the Bank.

Documents Required for OPC Registration

1. How long is the incorporation of the Company valid for?

Once a Company is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and maybe struck off from the register after a period of time. A struck-off Company can be revived for a period of upto 20 years.

2. What is a Digital Signature Certificate?

A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of a proposed Company.

3. What is Director Identification Number (DIN)?

Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.

4. What is authorized capital fee?

Authorized capital of a Company is the amount of shares a company can issue to it shareholders. Companies have to pay the Government an authorized capital fee to issue shares in a Company. Companies have to pay authorized capital fee for a minimum of Rs.1 lakh.

5. How many people are required to incorporate a one Person Company?

To incorporate a One Person Company, a Director and a nominee is required. A nominee member is one, who shall, in the event of promoter member`s death or incapacitation become a member of the Company.

6. What are the requirements to be a Director or Nominee in a OPC?

Only a natural person who is an Indian citizen and a resident in India is eligible to incorporate a One Person Company or be a nominee member. The Director or Nominee must also be over 18 years of age. A person can incorporate upto five One Person Companies.