How to Register a One Person Company in India?
Introduction
Starting your own business as a single owner? Registering a One Person Company (OPC) in India is the best legal way to do it. An OPC gives the benefit of limited liability and full control to a single person. In this blog, we will guide you step-by-step on how to register a One Person Company legally in India. It’s simple, easy, and perfect for solo entrepreneurs.
What is a One Person Company?
An individual can start and manage a One Person Company (OPC), which is a type of company. Like a Private Limited Company, it is a separate legal entity but requires only one director and one shareholder. This structure suits individual entrepreneurs who want to run a business with the benefits of limited liability and better legal protection. The Companies Act, 2013, registers the OPC, making it an ideal choice for small business owners who want to scale their business legally.
What are the Minimum Requirements for One Person Company Registration?
- There must be one individual as the director of the company.
- The company must have one shareholder, who can also be the director.
- The director/shareholder must be an Indian citizen and resident in India.
- A resident Indian nominee must be appointed who also consents in Form INC-3.
- The company must have a registered office address in India with valid proof.
- There is no minimum capital required to start an OPC.
- OPCs cannot carry out NBFC or investment activities.
What Documents are Required to Register a One Person Company Legally?
- Proof of Identity of the Director such as Aadhaar Card, PAN Card, etc.
- Proof of Identity of the Nominee
- Proof of Address of the Director
- Bank Statement
- Utility Bill
- Passport or Voter ID (if applicable)
- Proof of Registered Office Address
- Rent Agreement (if renting)
- Property Ownership Document (if owner)
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Nominee Consent (Form INC-3)
- Declaration by Director (Form INC-9)
- Director’s Consent (Form DIR-2)
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Process of One Person Company Registration
Registering a One Person Company (OPC) in India is a fully online and structured process governed by the Companies Act, 2013 and regulated by the Ministry of Corporate Affairs (MCA). Below is a step-by-step guide explaining each stage in detail:
Step 1: Obtain Digital Signature Certificate (DSC)
The first step is to get a Digital Signature Certificate (DSC) for the proposed director. It is used to sign the company registration forms online. You can apply for a DSC through government-approved agencies like eMudhra or VSign. To get the DSC, you need to submit your PAN, Aadhar, photo, email ID, and phone number. This step is important because all company documents are filed digitally.
Step 2: Apply for Director Identification Number (DIN)
A Director Identification Number (DIN) uniquely identifies each company director. When a person becomes a director for the first time, the system automatically generates the DIN while they file the company incorporation form (SPICe+). They don’t need to file a separate form for it. This number allows the government to legally track all directors.
Step 3: Reserve Company Name using SPICe+ Part A
Choose a unique name for your OPC and get it approved by the Ministry of Corporate Affairs (MCA). Apply for name reservation using the SPICe+ Part A form. Ensure the name doesn’t match any existing company or trademark and ends with ‘(OPC) Private Limited’. Once the MCA approves it, the name will be reserved for 20 days, allowing you to proceed with the next steps.
Step 4: Prepare the Required Documents
Now, collect and prepare all the documents needed to register your OPC. This includes the Memorandum of Association (MoA) and Articles of Association (AoA), proof of office address, PAN and Aadhar of the director and nominee, and a signed consent form from the nominee (Form INC-3). You’ll also need to prepare declarations and consent to act as a director (Forms INC-9 and DIR-2). These documents are submitted with the registration forms.
Step 5: File SPICe+ Part B and Linked Forms (AGILE-PRO-S, MoA, AoA, INC-3, INC-9, DIR-2)
Once all documents are ready, fill and submit SPICe+ Part B, which includes company details like capital, office address, and director details. Along with it, file linked forms such as AGILE-PRO-S, MoA and AoA, nominee consent form (INC-3), and director declarations (INC-9 and DIR-2). All these are filed online on the MCA portal in one go.
Step 6: Pay Government Fees and Stamp Duty
After you submit the forms, you must pay the registration fees and stamp duty. The amount depends on your company’s authorized capital and the state of registration. You must make the payments online through the MCA portal. The system will process your application only after you pay the fee.
Step 7: Obtain Certificate of Incorporation (COI) from ROC
Once the Registrar of Companies (ROC) verifies your application and documents, you will receive a Certificate of Incorporation (COI). This certificate confirms that your OPC has been officially registered. Along with the COI, you’ll also get the Company Identification Number (CIN), PAN, and TAN. After this, your One Person Company is legally ready to operate.
What are the Benefits of One Person Company Registration?
- Limited Liability Protection: In an OPC, the sole director has limited liability to the company’s share capital. This means that if the company faces financial losses or legal issues, the director’s personal assets remain protected. This protection offers a safety net and encourages entrepreneurs to take risks without fearing personal loss.
- Easy to Incorporate and Manage: Registering an OPC is simpler compared to other types of companies, such as private limited companies. It requires only one person to start the business, making it perfect for entrepreneurs who want to run a business alone but still enjoy the benefits of a corporate structure. Additionally, it has fewer compliance requirements, making it easier to manage.
- Separate Legal Entity: People consider an OPC a separate legal entity from its owner. This means the company can own property, enter into contracts, and even sue or be sued in its own name, distinct from the director’s personal identity. This separation enhances the business’s credibility and trustworthiness.
- 100% Ownership: Unlike a private limited company, where multiple shareholders divide ownership, an OPC allows a single director to own 100% of the business. This structure gives the owner full control, enabling quicker decision-making and more streamlined operations.
- Tax Benefits and Financial Flexibility: OPCs enjoy the same tax benefits and exemptions as a private limited company. The tax rate for OPCs is also favorable. Additionally, it can take advantage of deductions and exemptions under various sections of the Income Tax Act, making it a cost-effective option for solo entrepreneurs.
- Easy Funding Opportunities: Though OPCs have limited shareholders, they can still raise funds through loans, venture capital, or even by issuing shares (with a nominee director). OPCs are eligible to raise funds from financial institutions and investors more easily than sole proprietorships.
- Perpetual Succession: Since an OPC is a separate legal entity, it enjoys perpetual succession, meaning the company continues to exist even if the sole director passes away or becomes incapacitated. The nominee director can take over the company in such cases, ensuring continuity and stability for the business.
- Credibility and Professional Image: Incorporating as an OPC gives the business a professional image and legal credibility. It helps build trust with clients, partners, and investors by presenting the company as a formal corporate entity rather than an informal sole proprietorship.
Conclusion
Registering a One Person Company (OPC) is an excellent choice for solo entrepreneurs who want the benefits of limited liability, separate legal entity, and complete control over their business. With the step-by-step registration process outlined above, starting your OPC in India is a simple and efficient way to establish a formal business structure. Whether you’re starting a small business or planning to scale up, an OPC provides the legal protection and flexibility needed to succeed. It’s a perfect option for individuals looking for a professional image, tax benefits, and the ability to raise funds
Suggested Read :
OPC Compliance After Incorporation
OPC Turnover Limit for Small Businesses
Benefits of One Person Company
FAQ
1. What is the minimum capital required to register an OPC?
There is no minimum capital requirement to register a One Person Company (OPC) in India. You can start with any amount.
2. When can I start operating my OPC after registration?
Once you receive the Certificate of Incorporation (COI) from the Registrar of Companies (ROC), you can start operating your OPC immediately.
3. Why is a nominee required for OPC registration?
A nominee is required to ensure that the company has continuity in case the sole director is unable to continue due to death or incapacity. The nominee will step in as a director in such cases.
4. Where do I file the documents for OPC registration?
All the registration forms and documents for an OPC must be filed online through the Ministry of Corporate Affairs (MCA) portal.
5. How long does it take to register a One Person Company?
The process of OPC registration typically takes about 7 to 10 working days if all documents are in order, depending on the workload at the Registrar of Companies (ROC).
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