One Person Company Registration In India – Process, Cost, Documents, Benefits

The Companies Act, 2013 introduced the concept of a one-person company in India in order to support entrepreneurs capable of raising their own venture. This venture allows them to create a single-person economic entity. In the case of one person company registration online, only one member should be there while registering this form of a company, while in the case of a limited liability partnership firm or a private limited company, there must be at least two individuals in order to register the company.

As per Companies (Incorporation) Rules, 2014, the sole director and shareholder must propose an individual as his/her nominee in the Memorandum of Association and Articles of Association while incorporating a one-person company. During an untoward circumstance like the demise or incapacitation of the sole promoter, the sole promoter’s position is transferred to the nominee, who would have to commence the responsibilities of the sole promoter. A one-person company must file audited financial statements with the Ministry of Corporate Affairs at the end of every financial year. In case a one-person company’s turnover exceeds Rs. 2 crores, OPC is converted into a private company.

Characteristics Of One-Person Company

1. A one-person company consists of only one member who is a shareholder or director.

2. Easy to start the business and funs are easily available

3. The entire business would be managed by one person only, making it quite easy to handle all business-related issues.

4. Encourage the small size of businesses

5. Tax benefits

6. Freedom of operation

7. Limited Liability

8. Cash flow statement is not required for one-person company

9. Minimum regulations and compliance burden is not there with OPC

10. Borrowing Capacity

11. Separate Legal Entity

One Person Company Registration Process In India

The Steps to be followed for One Person Company Registration in India

Step 1: Apply For Dsc

The first step is to obtain the Digital Signature Certificate (DSC) of the proposed director, which required the following documents:

1. Address proof

2. Aadhaar card

3. PAN card

4. Photo

5. Email Id

6. Phone number

Step 2: Apply For Din

Once the Digital Signature Certificate (DSC) is made, the next step is to apply for the Director Identification Number (DIN) of the proposed Director in SPICe Form along with the name and the address proof of the director. Form DIR-3 is the option only available for existing companies. It means with effect from January 2018, the applicant need not file Form DIR-3 separately. Now DIN can be applied within the SPICe form for up to three directors.

Step 3: Name Approval Application

The next step while incorporating an OPC is to decide on the name of the Company. The name of the Company will be in the form of “ABC (OPC) Private Limited”.

The name can be approved in the Form SPICe+ 32 application. Only one preferred name along with the significance of keeping that name can be given in the Form SPICe+ 32 application. If the name gets rejected, another name can be submitted by applying another Form SPICe+ 32 application.

Once the name is approved by the MCA, we move on to the next step.

Step 4: One Person Company Registration Documents Required

We have to prepare the following documents, which are required to be submitted to the ROC:

1. The Memorandum of Association (MoA), which are the objects to be followed by the company or stating the business for which the company is going to be incorporated.

2. The Articles of the Association (AoA) lay down the by-laws on which the company will operate.

3. Since there are only 1 director and a member, a nominee on behalf of such a person has to be appointed because, in case he becomes incapacitated or dies and cannot perform his duties, the nominee will perform on behalf of the director and take his place. His consent in Form INC-3 will be taken along with his PAN card and Aadhar Card.

4. Proof of the registered office of the proposed company along with the proof of ownership and a NOC from the owner.

5. Declaration and Consent of the proposed Director of Form INC-9 and DIR-2, respectively.

6. A declaration by the professional certifying that all compliances have been made.

Step5: Filing Of Forms With McA

All these documents will be attached to the SPICe Form, SPICe-MOA, and SPICe-AOA, along with the DSC of the Director and the professional, and will be uploaded to the MCA site for approval. The Pan Number and TAN are generated automatically at the time of incorporation of the company. There is no need to file separate applications for obtaining PAN Number and TAN.

Step 6: Issue Of The Certificate Of Incorporation

On verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and we can commence our business.

One Person Company Registration Fees

Government fees for registering a one person company (OPC) in India depend on the nominal share capital of the company. For example, the government fees for the one person company registration whose share capital is 10,000 would be 2,000 rupees. Whereas if nominal share capital ranges between Rs. 10,00,000 and Rs. 50,00,000–Rs. 2,000. Rs. 200 will be added for every Rs. 10,000 or part thereof of nominal share capital.

However, there would be additional costs such as DIN application fees, stamp duties, and form filing fees as well for OPC Incorporation in India. Do not miss filing Form 20A once you have registered your OPC.

Documents For Obtaining OPC Certificate

For one-person company registration anywhere in India, for which our well-resourced and internationally admired law firm based in Delhi has been offering efficient and excellent legal services for many years, the following are statutory requirements:

1. One Director and one Subscriber; both can also be the same person

2. One Nominee

3. A Minimum Paid-Up Capital of INR 100,000/- (One Lac)

4. Copies of the PAN Cards of the Proposed Director/Subscriber and Nominee

5. DIN and DSC of the Director

6. Address Proofs of the Residences of the Proposed Director and Nominee

7. Proof of the Location of the Proposed Registered/Head Office of the OPC

The director/subscriber and the nominee should preferably be Indian citizens. Again, the proposed nominee must be an adult person and must not hold any beneficial share in the associated one-person company.