How to get One Person Company Registration?

One Person Company registration is a forward-thinking concept which promotes the Incorporation of micro-businesses with persons having entrepreneurial dreams but has limited time, resources or means to execute the business plan. It is the combination of Sole proprietorship and the standard company, where the OPC would enjoy the best of two worlds.

What is one person company?

Under Section 2(62) of Companies Act, OPC is defined as a company operated by an individual who is both a shareholder as well as a director at the same time.

The OPC is appropriate for a small business which has an average turnover of Rs. 2 Crores and the maximum amount of capital are limited to Rs. 50 Lac. An OPC can have more than one director and must be an Indian Resident. 

Who is allowed to go for One Person Company Registration?

Only Indian residents are allowed to register One Person Company. Besides, only one entity is allowed to be set up by the Ministry of Corporate Affairs.

Advantages of One Person Company Registration

·         Limited liability

The director's personal property is always safe, no matter the debts of the business.

·         Continuous existence

OPC has a separate legal identity. In case of death of the owner, the Company would pass on to the nominee director.

·         Greater credibility

OPC is more trusted among vendors and lending institutions.

·         Easy funding

It is easy for OPC to raise funds using venture capital.

What is the Eligibility Criterion?

The eligibility criteria are:

• Citizen of India;
• Can incorporate one-person Company;
• Can be a nominee for the member of the Company
• Should be staying in India for at least 182 days from the previous year.
• If the turnover exceeds Rs 2 crores, OPC has to be turned into a Private Limited Company within six months. 

Documents required for One Person Company Registration

Documents to be given by the director

• Scanned copy of PAN;
• Scanned copy of Voter ID or Driver's License;
• Scanned copy of Current Bank Account Statement or Mobile Invoice or Electricity bill;
• Scanned passport-sized photo.

Documents necessary for the registered office

• Proof of registered address;
• Copy of  rent agreement;
• No objection certificate from the landowner of concerned property;
• Copy of sale deed

Process of One Person Company Registration

Fill the SPICe+ form: 

The First Step to obtain the Digital Signature Certificate of the director is to fill up the SPICe + form, which requires the following details:

• Address Proof
• Aadhaar card
• PAN
• Photo
• Email Id
• Contact  Number

Documents Required:

We have to prepare the following documents which are required to be submitted to the Registrar of Company:

• The Memorandum of Association (MoA)
• The Articles of the Association (AoA)
• There is only 1 Director and a member so it is necessary to appoint a nominee because of the owner dies and cannot perform his duties, the nominee will act on behalf of the director and take his place.
• Proof of the Registered Office along with the evidence of ownership and a NOC from the owner.
• A declaration that all compliances have been followed.

Filing of Incorporation form:

The incorporation form has to be filed along with the documents mentioned above.

Approval of forms by MCA:

Ministry of corporate affairs will verify the forms submitted and approve the forms after verification.

Issue of  Certificate of Incorporation:

The Registrar of Companies (ROC) will issue a Certificate of Incorporation.

What are the Post One Person Company registration compliances?

Every One Person Company must follow the necessary compliances:

• Board meetings have to be held in every six months. The time gap should not be less than 90 days;
• Book of accounts has to be adequately maintained;
• Statutory audit by Charted Accountant
• Income tax returns have to be file every 30th September.

Can One Person Company (OPC) raise investment?

One Person Company (OPC) is a newly added concept that came into effect with the introduction of Companies Act 2013. This is the only legal structure that allows sole-person to start his Company with several concessions and rebates provided under the law.

OPC being a single-member the company, cannot raise investment through the issue of shares as 100% shareholding of OPC shall remain with single-member. Although, unlike other private limited companies, it is allowed to raise funds through the issue of debentures and loans.

Apart from several benefits and ease of running OPC, the law imposes several restrictions upon it, such as OPC is not allowed to raise capital through investment. We have discussed other such limits imposed on OPC along with its registration criteria henceforth.

What are the ways for conversion of OPC?

Conversion of OPC into Private Limited is governed under the Companies Act 2013. Converting the OPC will not affect its existing debt, liabilities, obligations or contracts. OPC can be converted into private limited in two following ways:

●       Voluntary: Voluntary conversion is when the owner, upon its discretion, willing to transform itself into private limited. He is not permitted to do so unless two years are expired from the incorporation date. Under voluntary conversion, OPC shall notify the registrar by filing INC-5 within 60 days of such transformation.

●       Mandatory: Mandatory conversion is when OPC shall convert itself into private limited compulsorily in the following situations:

·         Paid-up share capital exceeds INR 50 Lakhs; or

·         Average turnover of the preceding three years exceeds INR 2 Crore

What are the Annual Compliances of OPC?

Annual compliances of OPC are similar to that of private limited with slight changes in such requirements. We have enumerated the list of yearly agreement of OPC henceforth:

●       OPC shall mandatorily conduct at least one board meeting every six months. That is minimum two board meeting shall be attended yearly with a gap between two meetings being 90 days or more

●       Director of OPC in first Board Meeting of the financial year shall disclose his interest in other entities through form MBP-1

●       Director shall file a declaration of his non-disqualification with the Company every year through form DIR-8

●       However, OPC needs not to conduct AGM but is required to register financial statements through the filing of AOC-4 to ROC

●       It shall also file an annual return in form MGT-7 within 60 days of recording the entry of ordinary resolution in its minute books

Conclusion

One Person Company is a kind of Company that can be incorporated with just one member. This makes a One Person Company is a type of business entity which is best for individuals who want to start a business alone. With Corpbiz, you can easily have your own One Person Company Registration in India.