One
Person Company (OPC) is a unique entity where an individual can form a company
as a private limited company which is registered under the Companies Act, 2013.
It combines the concept of a company with limited liability and succession,
allowing a person to own and operate a company in their name. Therefore, it
eliminates the hassle of looking for the right co-partner to start a new
business and to incorporate a company. One-person company registration in India
mandates only a single director and a single member (which can be the same
person) who can represent the whole company with very less compliance in
comparison to the other form of companies.
Legal Status: OPC receives a separate legal entity status which also gives the protection to the person who has incorporated it. This essentially means that the liability of the person is limited to his/her shares and he/she is not personally liable for the loss of the company.
Limited Compliances: Under the Companies Act, 2013, OPCs are given certain exemptions and are required to adhere to very limited compliances in comparison to companies.
Easy Access to loans/funding: As the OPC gets the status of a private company, the chances of getting the fundraising through venture capitals and angel investors are much higher. Even the financial institutions prefer to give loans/funding to the companies rather than proprietorship.
Easy to incorporate: It’s easy to incorporate a One person company as only one director and one member is required to incorporate a company and the concept of minimum paid-up capital is also not required.
NRIs can register OPC: As per the recent amendment in the Union budget, OPCs can be incorporated by NRIs as well provided a person has continuously stayed in India for 120 days preceding the financial year.
For incorporating an OPC, there should be a nominee chosen before incorporation and the minimum authorized capital of INR One Lakh is required. Further, the following documents are required during the incorporation of the company in order to verify the Identity, Address Proof of the director as well as the proof of the Registered Office address:
Timeline for Registration of One Person Company in India
Once the name is approved and the request is submitted, the DSC and DIN of the proposed directors can be obtained in 1-2 days. The Certificate of Incorporation of an OPC is obtained in 3-5 business days. Accordingly, the whole incorporation process of an OPC can be completed within 10-15 days, subject to timely departmental approval from the respective department.
The OPC is required to adhere to the following compliance:
Drawing upon our extensive expertise in business registration and compliance, Seedling Associates has successfully assisted thousands of clients in establishing thriving one-person companies. We streamline the documentation process, offer comprehensive assistance in legal compliance, and expedite the registration timeline. With a proven track record of supporting businesses, our dedicated team provides personalized guidance and end-to-end legal support to create a strong foundation for your company, making the registration journey efficient and hassle-free.
An OPC is distinguished from other
business structures as the compliances are very less and an OPC is easy to
incorporate. Further, the govt. fee and expenses are also less and the director
has Limited liability.
Ensuring a seamless documentation process involves meticulous attention to detail. Our comprehensive guide not only simplifies this process but also ensures a smooth transition from idea to reality. The guide serves as a valuable resource, providing insights into the intricacies of documentation and facilitating a hassle-free establishment of your sole proprietorship in India. Emphasizing crucial legal requirements, it equips you to navigate the business landscape with compliance and confidence.
An OPC should be aware of the following requirements: (i) Must have a minimum paid-up share capital of INR 1 Lakh. (ii) Shares will not be allowed to be transferred to anyone else. (iii) An OPC is prohibited from giving any invitations to the public to subscribe to the securities of the company. (iv) An OPC must inform the Registrar about every contract entered into by the company with the sole member of the company within fifteen days from the date of approval.
An OPC can be converted voluntarily into any other kind of company (i.e. Private Limited or Public Limited) only after the completion of 2 years from the date of incorporation. A special resolution is required to be passed after increasing the minimum number of members and directors to two.