Complete Guide to One Person Company Registration with EPF and ESI in India

Introduction

One Person Company Registration (OPC) is a popular business structure in India that allows single entrepreneurs to operate as separate legal entities. Along with the benefits of limited liability and ease of management, OPCs can also avail themselves of social security benefits for their employees. In this article, we will explore the process of an One Person Company registration and delve into the requirements and procedures for obtaining EPF (Employees’ Provident Fund) and ESI (Employee State Insurance) registrations. Understanding these crucial aspects is essential for entrepreneurs looking to establish an OPC while ensuring compliance with labor laws.

What is One Person Company?

One Person Company (OPC) is a type of business structure introduced by the Companies Act, 2013 in India. It allows a single individual to establish and operate a company as a separate legal entity, providing limited liability protection. Unlike other traditional business structures, such as sole proprietorships, OPCs provide a distinct legal identity to the entrepreneur, separating their assets from the company’s liabilities.

With effect from February 23, 2020, all new businesses with 20 or more employees must register for EPF/ESI at the time of establishment. Any business that expands to at least 20 employees must register within one month of reaching that size.

EPF Registration

A provident fund plan is set up under the Employees’ Provident Funds Act of 1952. Under this scheme, an employee makes a specific contribution, and the employer of the company also makes a matching contribution. At the time of retirement or resignation, the employees get a certain sum of money towards the contribution paid with interest.

Advantages

1. Pension upon retirement
2. Medical Facilities
3. Emergency Reserve
4. Tax exemptions
5. Insurance coverage

ESI Registration

The Employees’ State Insurance Act of 1948 enabled the Employee State Insurance Scheme, a social insurance program. The purpose of this plan is to safeguard the employee’s or worker’s interests in the case of unforeseen circumstances or events.

Advantages 

1. Benefits of Parenting
2. Benefits for Temporary or Physical Disability
3. Health Benefits
4. Benefits for accidental deaths

One Person Company Registration for EPF/ESI

To register an One Person Company (OPC) in India with EPF (Employees’ Provident Fund) and ESI (Employee State Insurance), you need to follow these steps:

1. Obtain Digital Signature Certificate (DSC): The first step is to obtain a DSC for the director of the OPC. It is necessary to sign the registration documents digitally. You can get a DSC from government-approved agencies.

2. Director Identification Number (DIN): You must apply for the director’s DIN if they do not already have one. On the website of the Ministry of Corporate Affairs (MCA), Form DIR-3 must be submitted to get the DIN.

3. Name Reserving: Choose a special name for your OPC and make sure it’s available. When you have chosen a name that suits you, you can submit a name reservation request using Form SPICe+ (Part A) on the MCA website.

4. OPC incorporation: You can move on to register your OPC when the name has been approved. The incorporation procedure utilizes Parts A and B of Form SPICe+. The Memorandum of Association (MOA) and Articles of Association (AOA) are among the necessary information and paperwork that must be submitted.

5. EPF Registration: After incorporation, you need to register your OPC with the EPF. You can do this by visiting the EPF website and filling out the online registration form. You will need to provide the required details and upload the necessary documents.

6. ESI Registration: Similarly, you need to register your OPC with the ESI. Visit the ESI website and complete the online registration process. Submit the required details and upload the necessary documents.

7. Bank Account and PAN: Open a bank account in your OPC’s name and get your business’s Permanent Account Number (PAN). For many financial and tax-related transactions, these are required.

8. GST Registration (if applicable): Depending on the nature of your business, you may need to register for Goods and Services Tax (GST). Visit the GST portal and complete the registration process, providing the necessary details and documents.

Documents required to complete registration for EPF/ESI, Obligatory Register

The following list of documents is required for Compulsory Registration for EPF/ESI:

• Name of the new company.
• Date of Incorporation.
• Principal employer’s name,
• Verified copy of new company’s Permanent Account Number
• Verified copies of the licenses in the name of the company.
• Verified copy of cheque of company’s bank account.
• Address proof of the new company
• List of Directors of the company
• Residential proof of Director/ Proprietor / Partner of the company.
• Contact details of the Director/ Proprietor / Partner of the company.
• Email ID of Director / Proprietor / Partner of the company.
• Copies of all the invoices.
• List of employees

Conclusion

The Ministry of Corporate Affairs has published a notification relating to new enterprises’ obligatory registration for EPF/ESI in the hope to further the goals of Ease of Doing Business. It would probably make things harder for the new businesses and result in fines for breaking the rules. As a result, this will raise the cost of compliance for new businesses.