All You Need to Know About One Person Company Registration in India
One Person Company (OPC) is a concept of doing business that was introduced by the new Companies Act, 2013. Its legal structure is similar to a private company, however, the member is limited to one only. Specific processes have been laid out for One Person Company registration in India.
The Companies Act, 2013, has required a limitation on turnover and capital introduced in an OPC. If the capital exceeds Rs.50 lakhs or the turnover exceeds Rs.2 crores during the applicable period, OPC will no longer be applicable and must be converted into a private limited company.
An OPC combines the benefits of sole proprietorship and a private company. It enjoys a separate legal identity, and a person can start his company being both the director and the shareholder. Also, this concept is to support small business persons who prefer to have control rights over their company while enjoying the privileges of a private company. An OPC enjoys all the benefits of a private limited company like perpetual succession, limited liability, and easy transferability of ownership.
A person born in India and has lived here for at least 182 days can form an OPC. While carrying out One Person Company registration in India, appointing a nominee is compulsory. It makes it easy to transfer the ownership in the event of the single owner becoming disabled.
The Procedures of One Person Company Registration in India
An OPC is applicable for any kind of business except for charitable purposes or non-banking financial activities. There are four steps which take a minimum of 10 to 15 days for processing.
These steps are:
- Obtaining DSC (Digital Signature Certificate): The initial step for the incorporation process is to acquire DSC for both the subscriber to the MOA (Memorandum of Association) and Director(s) together with the nominee. This will enable the subscriber and director(s) to apply for DIN (Director Identification Number), as well as to file e-forms related to MCA (Ministry of Corporate Affairs).
- Acquire DIN (Director Identification Number): The next step is to apply for DIN from which the person will be registered as Director of the company. It is a unique number like PAN that you can acquire once in a lifetime.
- Application for reservation of name: The next step consists of applying for reservation of name for the proposed company. For this purpose, Form INC-1 has to be filed with the MCA with a maximum limit of six names. The name must be unique and not yet registered with the government. The MCA gives a Name Approval Letter which signifies that the name is registered for 60 days once approval is available. During this period, the applicant can apply for the Certificate of Incorporation. The ministry will cancel if failure to apply.
- Applying for the Certificate of Incorporation: The next step is to file the e-form SPICe for the Certificate of Incorporation together with SPICe_MOA and SPICe_AOA. The applicant then has to pay the stamp duty as per an auto-generated challan. Once you attach DSC with the MCA, the applicant will fill out the application forms that come from online for PAN and TAN of the company.
- Forming the MOA (Memorandum of Association) and AOA (Articles of Association): They are the most significant documents for any company. The MOA lists the primary aims of a company, together with the ancillary object of the company. The AOA displays the rules and regulations. It is based on which the firm should conduct its working, as per the Company’s Act. After verification by the MCA, the RoC may grant the Certificate of Incorporation (CoI). It provides conclusive evidence of the existence of the corporate. The COI contains the following:
- The company’s name.
- Company Identification Number (CIN).
- Incorporation date.
- Company PAN.
- The company’s registered office address.
- Digital Signature of the relevant authority.
One Person Company has all the advantages of a private limited company while retaining the control and shareholding of the business affairs. With several years of experience to its credit, 3E Accounting provides all kinds of assistance for One Person Company registration, such as registering the company name, getting DIN, acquiring DSC, forming MOA and AOA, etc. Do not hesitate to contact us and we will be glad to help you.