One Person Company (OPC) Registration In India

What are the requirements for one person company registration?

• Unique name: To register an OPC company, you must have a unique name for the proposed company
• Director: Company must have at least one natural person as a director and a maximum of 15 directors; age must be above 18 years of age.
• Share holders: There could be only one shareholder; he or she must be a natural person and must be a resident of India. It is common in new company registration for the director to also be the shareholder.
• Nominee: While registering a one person company, you need to propose any natural person above 18 years of age as a nominee. Nominees must be Indian citizens and residents of India. In the event of death or incapacitation, the nominee would automatically become the sole promoter of the OPC company.
• Company objects: To start an OPC company, you must define the nature of business, range of activities that company will carry out.
• Authorized capital: You must decide the authorized capital while incorporating an OPC company. The authorized capital of a company is the maximum amount of share capital for which shares can be issued by a company. The initial authorized capital of the OPC company is usually Rs. 1 lakh but can not be more than Rs. 50 lakh.For example: Suppose a company has an authorized capital of Rs. 300,000, then it can issue shares worth up to Rs. 300,000 to its shareholders and cannot issue anything beyond that.
• Registered office: When you start an OPC company in India, the law requires that your business must have an official address where any communication relating to the company is sent. The registered office address will be displayed on the incorporation certificate. This address will be publicly available on the ministry of corporate (MCA) website for anyone to see. An office can be owned or rented, and can be commercial or residential premises. You may use your residential address as your company registered office.
• Documents: OPC registration process is an online process. You can just scan / photograph the attested documents of the director, shareholders, and registered office from your mobile phone and send them to us, and the rest will be taken care of.

The following are the main advantages of registering an OPC (one person company):

• Controlling power with a single owner: This leads to fast decision making and execution. The founder can appoint as many as 15 directors in the OPC for company operations without giving any shares to them.
• Succession: An OPC needs to have a nominee designated by its members for the purposes of succession. In the event of the death of the member, the nominee becomes a member of the company and shall be responsible for running the company. However succession is not possible in sole proprietorship unless the proprietor executes the last testament and will.
• Limited liability protection to directors and shareholders: The primary benefit of OPC is its distinct identity from that of its owner, which separates the personal assets of shareholders and directors, protecting them in the event of a credit default.All potential unfortunate events in business are not always under an entrepreneur’scontrol. Therefore, it is important to secure the personal assets of the owner, if the business lands up in a crisis. While doing business as a sole proprietorship firm, the personal assets of the proprietor can potentially be at risk in the event of failure, but this is not the case for an OPC company, as the shareholder liability is limited to his shareholding. This means any liability or obligation that is purely of business nature will not impact the personal savings or wealth of an entrepreneur.
• Legal and social status for your business: OPC is a private limited company structure; this is the most popular business structure among startups in the world. It gives suppliers and customers a sense of confidence in the OPC business structure. Large organizations prefer to deal with (OPC) private limited companies instead of proprietorship firms because of the transparency factoring OPC. Unlike a proprietorship firm, this business structure enjoys corporate status in society, which helps the entrepreneur to attract a quality workforce and helps to retain them by giving corporate designations, like directorship.
• Helps for testing business models and enables funding: The OPC business structure enables startup entrepreneurs to easily test a business model and a prototype before approaching angel investors and venture capitalists for funding and easily converting into a multi shareholder private limited company.
• Easy to raise funds: venture funding, banking, and financial institutions prefer to lend money to the company rather than proprietorship firms. Often, banks insist the entrepreneurs convert their firm into a private limited company before sanctioning funds. So it is better to register your startup as a one person company rather than a sole proprietorship firm.
• Tax flexibility and savings: In an OPC, a company can make a valid contract with its shareholders or directors. Which means, as a director you can receive remuneration, as a lessor you can receive rent, as a creditor you can lend money to your one person company and earn interest. Director remuneration, rent and interest are deductible expenses which reduce the profitability of the company and ultimately bring down the tax liability of your business.
• Easy to manage and flexible in compliance: OPC is one of the easiest forms of business structure to manage. OPCs require relatively less compliance when compared to private limited or public limited companies (listed or unlisted). OPC is exempted from procedural formalities like annual general meetings, general meetings and extraordinary meetings.

Documents required for OPC registration:

For director ,shareholder and nominee:

• Passport size photograph.
• Copy of pan card.
• Copy of passport/ driving license/voter identity card
• Proof of residence (electricity bill/telephone bill /mobile bill / bank statement)

Documents required for the registered office:

• Electricity bill/ mobile bill/ telephone bill (business place)
• Copy of rent agreement (if rented property)
• Copy of property papers(if owned property)
• Landlord NOC (format will be provided)