One Person Company (OPC) Registration: A Complete Guide

Introduction

The concept of One Person Company (OPC) was introduced in India under the Companies Act, 2013, to encourage entrepreneurship and provide a structured business entity for sole proprietors. This model allows a single individual to operate a company with limited liability and enjoy the benefits of corporate status. OPC is an ideal choice for entrepreneurs who want to run their businesses independently without the complexities of a traditional private limited company.

Features of One Person Company (OPC)

• Single Ownership: Unlike other business structures, OPC allows a single person to own and manage the company.

• Limited Liability: The owner’s liability is limited to the extent of their investment in the company.

• Separate Legal Entity: OPC is a distinct legal entity separate from its owner, providing legal protection.

• Perpetual Succession: An OPC must appoint a nominee who will take over in case of the owner’s demise or incapacitation.

• Minimal Compliance: Compared to private limited companies, OPCs have fewer compliance requirements.

Eligibility Criteria for OPC Registration

1. Single Promoter: Only one individual can incorporate an OPC.

2. Indian Residency: The promoter must be an Indian citizen and a resident of India.

3. Nominee Appointment: A nominee must be appointed at the time of incorporation.

4. No Business Activities Restrictions: OPC cannot engage in non-banking financial activities.

5. Conversion Restrictions: An OPC must convert into a private limited company if its turnover exceeds Rs. 2 crores or if its paid-up capital exceeds Rs. 50 lakhs.

Documents Required for OPC Registration

• PAN card of the sole owner

• Aadhar card or any government-issued ID proof

• Passport-size photograph

• Address proof (Electricity bill, telephone bill, etc.)

• Rental agreement and NOC (if rented office)

• Digital Signature Certificate (DSC)

• Director Identification Number (DIN)

Step-by-Step Process for OPC Registration

Step 1: Obtain Digital Signature Certificate (DSC)

Since the registration process is online, the first step is to obtain a DSC for the sole promoter.

Step 2: Apply for Director Identification Number (DIN)

The sole owner must apply for a DIN, which is a unique identification number for company directors.

Step 3: Name Reservation (RUN Form)

Submit a name reservation application through the RUN (Reserve Unique Name) service on the MCA portal. The name should be unique and must include ‘(OPC) Private Limited’ at the end.

Step 4: Drafting of Memorandum and Articles of Association

Prepare the Memorandum of Association (MOA) and Articles of Association (AOA), defining the company’s objectives and operational guidelines.

Step 5: Filing Incorporation Forms with MCA

Submit the SPICe+ (Simplified Proforma for Incorporating a Company Electronically Plus) form along with the required documents on the MCA portal.

Step 6: Issuance of Certificate of Incorporation

Upon verification, the Ministry of Corporate Affairs (MCA) issues the Certificate of Incorporation, confirming the legal existence of the OPC.

Benefits of OPC Registration

• Easy to Manage: Less compliance compared to a private limited company.

• Legal Recognition: Provides credibility and legal status to the business.

• Tax Benefits: Lower tax rates than sole proprietorships.

• Limited Liability Protection: Protects personal assets from business liabilities.

• Easy Funding: OPC can raise funds through loans or by converting into a private limited company.