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One Person Company (OPC) Registration : Simplifying Business Establishment
Before the enactment of the Companies Act of 2013, forming a company in India required at least two individuals. However, with the advent of this legislation, there’s been a notable shift towards promoting One Person Companies (OPCs). The Companies Act of 2013 specifically facilitates the creation and operation of OPCs in India, allowing a single individual to spearhead such entities. Unlike traditional private companies, which mandate a minimum of two directors and two members, a One Person Company can be formed by a single person. This legal framework offers a simplified avenue for individuals looking to establish and operate companies independently in India.
Features of One Person Company in India
Simple Succession:
- Despite being managed by a single person, OPCs offer opportunities for perpetual succession. Following the demise of a company member, the nominee can oversee the business’s operations.
Limited Liability:
- Members of a one-person company enjoy limited liability. As OPCs are registered corporations, they are treated as separate legal entities, providing members with enhanced protection. Members’ liability is restricted to their shares, absolving them of accountability for any losses incurred by the company.
Shareholder and Sole Directorship:
- In an OPC, a single member serves as both director and manages the company’s day-to-day operations. There is no need for an additional executive director to oversee daily operations. A single member fulfills both roles, serving as a shareholder with full responsibility.
Ownership of Real Estate:
- As OPCs are considered separate legal entities, individuals have the authority to own company property and assets in their name. Others cannot stake claim to these properties, including machinery, factories, residential properties, structures, and other assets.
Checklist for One Person Company (OPC) Registration in India
To register an OPC in India, the following checklist must be adhered to:
Meet Membership Standards:
- Ensure compliance with membership standards at both maximum and minimum levels.
Selection of Nominee:
- Select a nominee person before incorporation and file Form INC-3 for nominee approval.
OPC Name Selection:
- Select a unique name for the OPC in accordance with Companies (Incorporation Rules) 2014.
Minimum Authorized Capital:
- Ensure a minimum authorized capital of Rs. 1 lakh for the OPC.
Digital Signature Certificate (DSC) for Director:
- Obtain a DSC for the potential director of the OPC.
Registered Office Address Proof:
- Provide proof of the OPC’s registered office, including rental agreement, NOC from the landlord, and utility bills.
Documents Required for One Person Company (OPC) Registration in India
The crucial documents required for OPC registration include:
- Scanned copy of a current bank statement.
- Utility bills such as phone, electricity, gas, and mobile bills.
- Digitally transcribed rental agreement in English.
- Digital transcription of landlord’s no-objection certificate.
- Scanned copy of property or sale deeds in English (if property is owned).
Procedure for One Person Company (OPC) Registration
The procedure for OPC registration in India involves the following steps:
- Obtain Digital Signature Certificate (DSC) for the potential director.
- Reserve a unique name for the OPC.
- File incorporation form (SPICe+) with the Registrar of Companies (ROC).
- Receive Certificate of Incorporation with PAN and TAN.
- Open a bank account and commence business operations.
Restrictions on One-Person Company
Despite its advantages, starting an OPC comes with certain constraints:
Limited Scalability:
- OPCs are suitable for small business structures and may not be ideal for scaling up operations due to restrictions on the total number of members.
Restrictions on Commercial Activities:
- OPCs are prohibited from engaging in non-banking financial investment activities.
Absence of Distinct Ownership and Management:
- With a single person serving as both director and manager, there may be challenges in maintaining a clear boundary between ownership and management roles.
LLP Compliance
OPCs must comply with specific legal requirements outlined in the Companies Act of 2013 and secure local registrations as per state legislation. These compliances include appointing the first auditor, issuing share certificates, paying stamp duty, and filing various forms within specified deadlines.
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At StartBizzIndia.com, we offer:
- Expert Guidance: Access expertise from a diverse team of professionals.
- Experience excellent service, backed by high customer satisfaction.
- 24/7 Assistance: Receive round-the-clock support for all OPC registration queries.
- Quick and Easy Process: Experience a streamlined and hassle-free OPC registration process.
- Complete Online Process: Register your OPC seamlessly through our online platform.
Frequently Asked Questions (FAQs)