How To Do One Person Company Registration In 6 Easy Steps?

One Person Company – this concept in India was introduced through the Companies Act, 2013 in order to provide support to entrepreneurs who are capable of starting their own venture. This concept allows them to own a single person economic entity. The biggest advantage of One Person Company (OPC) is that a single person can run the OPC while there have to be at least two members for incorporating a Limited Liability Partnership (LLP) or Private Limited Company. Or, in simple words, just 1 Director and 1 member (both can be the same person) are required to form the One Person Company.

Also Read: Why Trademark Registration Is Important For Your Business?

The One Person Company definition as per the Section 2(62) of the Companies Act, 2013 is

“A company which has only one person as a member”

However, there are a few limitations in operating the One Person Company. One such is that the OPC has to mandatorily nominate a nominee Director in the AoA and MoA of the entity – in case the sole director of the company is disabled. Also, the OPC would convert into a Private Limited Company if it crosses an annual turnover of Rs. 2 crores. The OPC must file its audited financial statement with the Ministry of Corporate Affairs at the end of the financial year.

Apply for MSME Loan

Having said this, it is imperative for the Entrepreneurs to carefully consider One Person Company features before incorporating OPC.

What are the Benefits of One Person Company?

Also Read: MSME Registration: How To Obtain MSME Registration Certificate Online?

Now let us take a look at the advantages of One Person Company:

• Separate Legal Entity: A separate legal entity, One Person Company is capable of doing everything as like an entrepreneur would.

• Easy Funding: OPC can raise funds through financial institutions, venture capital, angel investors, etc.

• Minimum Requirement: The requirements of incorporation of one person company are:

  1. Minimum 1 Shareholder
  2. Minimum 1 Director (Director and shareholder can be the same person)
  3. Minimum 1 Nominee Director

• More Opportunities, Limited Liability: OPC offers more opportunities and limited liability. The liability of the one person company is limited to the value of the share the owner hold and with this, he can take more risks without suffering the loss of any personal asset.

• Benefits of Small-scale Industries: The One Person Company can avail all the benefits of the small-scale industry, such as avail a business loan at low-interest rate.

• Income Tax: The remuneration paid to the Director of the OPC is deductible from the Income Tax Return, as per the Income Tax Law.

What is the Difference between One Person Company and Sole Proprietorship?

Also Read: Top 3 MSME Schemes In India By The Indian Government

The following is the difference between One Person Company and Sole Proprietorship:

What are the Documents Required for One Person Company Registration?

Also Read: Digital Marketing Do’s For SMEs

To register One Person Company, you require the following documents:

Identity & Address Proof: The main director and nominee director of the One Person Company are required to submit their identity and address proof. PAN card is a mandatory identity proof. And other documents for one person company registration are residence proof documents, such as electricity bill or bank statement, which must not be more than 2 months old.

Registered Office Proof: It is mandatory for the company to have a registered office in India. The registered office address proof, such as water bill, electricity bill, or property tax can be submitted. A letter of consent from the landlord with his/her consent to use the property as a registered office must also be submitted.

The other documents for OPC registration include:

• MoA (Memorandum of the Association) stating the business for which the company is incorporated.

• AoA (Articles of the Association) which states the laws on which the company will operate.

• The nominee and his/her consent to perform the duties of the director in case the Director is incapacitated or dead should also be submitted. The nominee’s Aadhaar Card and PAN card should also be submitted along with the consent form.

How to Register One Person Company?

Also Read: GST Bill: Comprehensive Guide To GST Invoice

The process of One Person Company Registration includes the following 6 easy steps:

Step 1:

Apply for DSC: Applying for a Digital Signature Certificate of the proposed Director is the first step. The following documents are required for it:

• Aadhaar Card

• PAN Card

• Address Proof

• Photograph

• Email ID

• Phone Number

Step 2:

Apply for DIN: The next step is to apply for Director Identification Number (DIN) for the proposed Director. Form DIR-3 along with the address proof of the Director can be submitted for it.

Step 3:

Name Approval Application: The third step is to decide the name of the company which has to be in the form of “XYZ Private Limited”.

The two options by which the name can be submitted is by making application in Form SPICe 32 or through RUN Web Service of MCA. The form must contain two proposed name and the significance of using that name. The company’s name is approved by the MCA.

Step 4:

Documents Required: The following are the required documents:

1. MoA

2. AoA

3. Consent of the nominee Director in the Form INC – 3

4. The proof of the registered office of the entity along with a NOC from the owner and proof of ownership.

5. Affidavit & consent of the proposed director.

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

Step 5:

Filing of Forms with MCA: Upload all the documents to the MCA site for approval — SPICe Form, SPICe – MoA, SPICe – AoA, DSC of the Director and professional. Form 49A and 49B will be generated after uploading the documents. The same can be used to generate PAN and TAN of the company, which again has to be uploaded to the MCA website after affixing the DSC of the proposed Director.

Apply for Working Capital Loan

Step 6:

The Issue of the Certificate of Incorporation: A Certificate of incorporation will be issued from the Registrar of Companies on verification.

Want to read the latest posts on social media? Then follow us on Facebook, Twitter, and LinkedIn!