OPC Registration

One Person Company Registration

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One Person Company (OPC) Registration - An Overview

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One Person Company registration is essentially a one-man show. In accordance with the Companies Act, 2013, a company can be incorporated and run by a single person. An OPC has features of a company with the advantages of a sole proprietorship. OPC registration is easier than that of a private company and comprises lesser compliances. As per Section 2 (62) of the Companies Act, a one person company registration can be done with only one director and one member. Please note that the director and the member can essentially be the same individual.

What is a One Person Company Registration?

One Person Company registration is a company run by a single person wherein he/she may or may not be the director and the member. An OPC registration was formed as a refinement of the structure of a sole proprietorship firm. The director in an OPC has liability limited to his/her extent of investment in the firm whereas he/she is the sole shareholder.

If a One Person Company has an annual turnover of Rs 20 crores (w.e.f. 2021-22 passed in the Union Budget, 2021). three times in a row or it acquires a paid-up fund of Rs two crores and above, it has to be converted into a private or a public limited company within a period of six months.

Benefits of One Person Company Registration

Given below are a few advantages of one person company registration:

1. Limited extent of liability:

In a one person company registration, the liability of the director is limited to the extent of the amount invested by him in the firm. In case of accumulation of debts, he/she is not liable to sell his/her personal property to pay it off.

2. Fewer Compliances:

Under the Companies Act, 2013, there is no need for a Company Secretary to audit and sign the books of accounts. It can be signed by the director himself/herself.

3. Ease of Incorporation:

It is easy to incorporate and do a One Person Company registration as compared to other forms of the entity since only one member and one nominee are required for the incorporation. The member can also be the Director. The minimum paid-up capital to do a one person company registration in Mumbai is Rs. one lakh.

4. Perpetual Succession:

While sole proprietorships come to an end on the death of the proprietor, after an OPC registration, the company turns into a separate legal entity. An individual is required to be appointed as the nominee director. On the death of the member, the nominee will run the company in the member's place.

5. Greater credibility:

In an OPC registration, the company needs to have its books audited every year. This makes it more credible among vendors, financial institutions and customers than a private company.

Documents required for one person company registration

  1.   Photocopy of PAN (Permanent Account Number) card of the owner
  2.   Passport size photograph of the owner
  3.   Scanned copy of Aadhaar Card/ Voter identity card as proof of Identity
  4.   Scanned copy of Rent agreement (In case of rented property)
  5.   Electricity/Water bill (Self-owned land)
  6.   Scanned copy of Property papers (If owned property)
  7. Landlord NOC

How to register one person company?

Let us see how to register one person company:

1. Apply for DSC:

The first step in the OPC registration is to obtain the Digital Signature Certificate of the proposed Director. This process requires the following documents:

  • Aadhar Card

  • Address proof

  •  PAN Card

  • Passport size photograph

  • E-mail ID

  • Phone number

2. Apply for DIN:

The Director is then required to obtain a Director Identification Number in the SPICe Form.

3. Name Approval Application:

According to Section 3(1)(c) of the Companies Act, the words ‘One Person Company’ must be mentioned below the name of the company in bracket wherever it appears. The chosen name can be approved in the Form SPICe+32 application.

4. Preparation of MoA and AoA:

The Memorandum of Association is a document comprising of the objectives that are to be followed by the company. The MOA states the nature and category of the business for which the company is being incorporated. The Articles of Association lay down the laws on which the company will operate. These documents have to be submitted to the Registrar of Companies. The Registrar of Companies will then issue a Certificate of Incorporation after due verification of all the documents.

5. Greater credibility:

In an OPC registration, the company needs to have its books audited every year. This makes it more credible among vendors, financial institutions and customers than a private company.

Basic mandatory compliance for One Person Company registration

The basic mandatory compliance for one person company registration comprises the following:

  • At least one Board Meeting has to be done in each half of the financial year. Please note that the time gap between the two Board Meetings should not be less than a period of ninety days.
  • Maintenance of proper books of accounts.
  • Statutory audit of Financial Statements annually.
  • Filing of one person company registration income tax returns before 30th September every year.
  • Filing of Financial Statements in Form AOC-4 and Annual Return in proposed Form MGT 7-A as per the Companies Act, 2013.

Guidelines for Members and Directors in a One Person Company Registration

  • The minimum and a maximum number of members in a one person company registration can only be one. As per Section 152(1) of the Companies Act, an individual being a member of OPC is deemed as the first Director of the OPC until the nominee director is duly appointed by the member.
  • A person can continue to be a member in only one OPC.
  • The minimum and the maximum number of directors in a one person company registration can be one and fifteen respectively.

Nominee in an OPC

A one person company registration must include one person as ‘Nominee’ in the event of death, incapacity, etc. who will do the following-

(a) become a member and Director of OPC;

(b) be entitled to all shares of the OPC, and

(c) bear all liabilities of OPC.

However, written consent of the individual to act as the nominee must be obtained and filed with the Registrar of Companies at the time of incorporation along with MoA and AoA to commence the business effectively.

Please note that a nominee may withdraw his/her consent by giving a notice in writing to the member of the OPC. The member then nominates another person within 15 days of the receipt of the notice of withdrawal. 

In case of an individual, being a member in One Person Company becomes a member in another OPC registration by virtue of his/her being a nominee in that OPC, he/she shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days as prescribed in the Companies Act.

The penalty of non-compliance with the provision of the Act

If an OPC infringes the provisions of Companies Rules, 2014, such contravening party will be liable to pay a fine up to Rs. 10,000. This may further extend by Rs. 1000 every day during which such contravention continues.

WHY TAXZONA?

  1.   For your one person company registration in Mumbai, we submit the application Run Form for your OPC name approval.
  2.   We draft the MoA (Memorandum of Association) and AoA (Articles of Association) for your one person company registration.
  3.   We file the incorporation documents with the MCA for you. The PAN and TAN are allocated simultaneously. The documents are forwarded to the Registrar of Companies which further issue the Certificate of Incorporation after due verification.
  4.   We keep you updated with the status of your OPC Registration & GST registration online.

FAQ's

All OPC registration needs to do Annual Compliance every year

Form-8 consists of the statement of Account and Solvency. It consists of information related to the statement of assets of the LLP and liabilities and statement of income and expenditure of the LLP.

The Due Date for filling of Annual Return one person company registration is within 180 days from the end of the FY.

There are multiple Forms required to be filled. For more details contact us.

Statutory Audit under Companies Act 2013 is mandatory for OPC Annual Compliance.

Every OPC is required to do Statutory Audit irrespective of Turnover, Share Capital, etc.