One Person Company (OPC)

One Person Company
Online Registration in India

One Person Company (OPC) is another form of organisation newly provided under the Companies Act, 2013 wherein the entity can be incorporated with a single member. It has all the protection and responsibilities as available to a Private Company with the major change that the number of shareholders that is required to incorporate the Company is 1. Once the Company achieves a certain turnover level, the OPC has to get converted into a Private Limited Company. The promoter also can choose to convert the Company voluntary once the Company is in operation for a certain period of time. The Director of the Company should have a Director Identification Number and the subscriber has to procure a Digital Signature for registration. Process of incorporation is online and it takes 10-15 working days from the date you give your complete documents to us and subject to availability of the proposed name.

Benefits of One Person Company

Limited Liability

Starting OPC firm provides the promoter full control over the company while limiting his/her liability.

Concentred Control

Control of the business rests with the director and shareholder who invariably would be the promoter.

Relaxed Compliance Framework

OPC has fewer compliances and legal restrictions, compared to private limited company.

Perpetual existence

OPC will survive if the founder is willing to nominate a successor by making him/her a nominee.

Minimal Restrictions

Compared to other forms of business incorporating an OPC is attractive to small business owners due to minimal restrictions such as:
* 1 Shareholder and 1 Director, the same individual can take these posts
* Requires only 1 Nominee for the shareholder.
* No Minimum Share Capital requirement.

Flexible Tax Regime

One Person Company can enter into the contract with anyone, lend or pay salary to its promoter and receive interest for payments made to its promoter. Thus, the promoter of the business can get tax benefits in both OPC and individual capacity by drawing remuneration and interest.

Easy Finance Options

One Person Company reflects all the benefits of a Limited Company. One such benefit is that it’s flexible and facilitates better business management structure compared to Sole Proprietorship. Thus, banks and financial institutions prefer lending to OPC firms.

The Incorporation Process For One Person Company Are As Follows:

Minimum 1 person as Director.

  • Minimum 1 Nominee
  • PAN Card Copy of Director and Nominee
  • Proof Of Identity of Director and Nominee (Passport/Driving Licence/Voters ID)
  • Proof of Residence of Director and Nominee(Bank Statement/Electricity Bill/Telephone Bill/Mobile Bill)
  • Address proof of the proposed Registered Office (Electricity Bill/ Property Tax Receipt/Postpaid Mobile Bill, Gas bill)
  •  NOC from the person who owns the property mentioned above.
  • 2 passport size photos of proposed Director and Nominee.

Other details required:

  • Main Objective of the Company- Proposed activities of the company
  • Proposed names for your company

Its hard to digest all if it is at one stretch. So an introduction about a business or start up formation options is vital for deciding the right form of business registration. The Companies Act, 2013 and Limited Liability Partnership Act, 2008 have brought more business formation choices for entrepreneurs. The key factors that influence the legal form of a business are nature of your business, customer’s profile (corporate, small businesses or individuals ), expected business turnover, scalability  of your business idea and future funding prospectus.

 

Every entrepreneur/promoter should take the pain to know about the pros and cons of these legal forms.

 

Formation

Do I need a Registration?

What type of business names can I keep?

How risky is it for me?

To what extent is each member of the business liable?

Tell me the minimum membership limit.

Is foreign ownership allowed?

How much will I get taxed?

What are my annual tax filing norms?

Is Annual Audit Required?

Can I convert my business into any other legal form??

Compulsory Conversion to Private Limited Company Applicable?

One Person Company (OPC)

Yes, Ministry of Corporate Affairs registers One Person Companies under the Companies Act, 2013

Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s or companies

OPC is a separate legal person in the eyes of law. So, the share holder is not responsible for business liabilities.

Liability is limited to his/her share capital contribution.

1 People

NA

Profits get taxed at 25% plus cess and surcharge is applicable if profit exceeds 1 Cr.

Every financial year OPC must file Annual Accounts and Annual Return with the Registrar of Companies. Plus, Income Tax must be filed separately.

Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is applicable if turnover exceeds 2 Crs

OPC could be converted into any legal form. But, it depends on the number of promoters, business operations, funding requirements and other factors. Limited Liability Partnership or Private Company is preferred by promoters when seeking expansion of their OPC

NO

Private Limited Company

Yes, Ministry of Corporate Affairs registers Private limited company under the Companies Act, 2013

Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s or companies

Private Limited Company is a separate legal person in the eyes of law, registered under Companies Act 2013. So, the shareholders are not responsible for business liabilities.

Liability is limited to his/her share capital contribution.

2 People

Yes

Profits get taxed at 25% plus cess and surcharge is applicable if profit exceeds 1 Cr.

Every financial year Private Limited Company must file Annual Accounts and Annual Return with the Registrar of Companies. Plus, Income Tax must be filed separately.

Statutory audit is to be conducted irrespective of business transaction and turnover. Income tax audit is applicable if turnover exceeds 2 Crs

Yes, Private Limited Company can be converted into a Public Company or LLP. Even, Public Limited Company can be converted into a Private Limited Company.

NO

Limited Liability Partnership

Ministry of Corporate Affairs registers an LLP business under the Limited Liability Partnership Act, 2008.

Firstly, submit a set of names to Registrar of Companies, wait for approval from Registrar. Best practice is that the names submitted must be inoffensive, legal and not similar to any registered LLP’s or companies.

“LLP” is a separate legal person in the eyes of law, registered under LLP Act 2008. So, the partners are not responsible for business’ liabilities.

Liable to the extent of their contribution (in money, in kind or in services extended) to the LLP.

2 People

Yes

Profits get taxed at 30% plus cess and surcharge is applicable if profit exceeds 1 Cr.

Every financial year Annual Statement of Accounts & Solvency and Annual Return with the Registrar.Plus, Income Tax must be filed separately.

Statutory audit is to be conducted if partners contribution exceeds 25 lakhs or turnover exceeds 40 lakhs. Income tax audit is applicable if turnover exceeds 2 Crs

Yes, Private Limited Company can be converted into a Public Company or LLP. Even, Public Limited Company can be converted into a Private Limited Company.

NO

Partnership

Yes. Register with Registration of Firms

Firm can use any name that he likes, but avoiding names already trademarked is advisable.

Partners will stand liable for the liabilities of the business.

Unlimited liability.

2 People

No

Profits get taxed at 30% plus cess and surcharge is applicable if profit exceeds 1 Cr.

Only Income Tax must be filed for the income of firm and partners.

Only income tax audit is applicable if the turnover exceeds limit of 2 Cr

Yes, Partnership can be converted into a Private Limited Company or LLP.

NO

Sole Proprietorship

No legal requirement to do-so.

Promoter can use any name that he likes, but avoiding names already trademarked is advisable.

Promoter will stand liable for the liabilities of the business. Because the business is not considered as a separate legal person/entity.

Unlimited liability.

1 People

NA

Individual income tax slab of proprietor is the basis of taxation.

Only Income Tax must be filed on the basis on proprietor’s income.

Only income tax audit is applicable if the turnover exceeds limit of 2 Cr

NO

Yes. If turnover exceeds 2 cr

What are the documents required to incorporate an OPC?

Scanned copy of following documents is required to incorporate a company;

PAN Card

Passport in case of Foreign Nationals / NRIs

Voter’s ID/Passport/Driver’s License

Bank Statement/Telephone or Electricity Bill, latest

Passport-sized photograph

Specimen signatures of Directors

Rent Agreement or No-Objection Certificate from the owner of the premises

Copy of Sale Deed, if owned.

How much time is required to incorporate an OPC?

Incorporation process is fully online now. After submission of scanned documents and approval of the name of the OPC, incorporation will take about 15 working days.

Is it difficult to get a name of my choice for my company?

Getting a name of your choice is easy if you follow few basic guidelines such as similar names of existing companies or similar sounding names  or those containing prohibited words such as Government, Bank, Exchange etc unless otherwise approved by the respective authorities. It is mandatory to mention “OPC” within brackets after the name of the company.

Is it necessary for me to obtain a digital certificate?

Since documents are filed electronically, Digital Certificate (DSC) is mandatory. Once obtained, you can use this DSC for various other purposes where a digital signature is required.

Is it necessary to audit the books of accounts of a company?

It is necessary to appoint an Auditor within 30 days of incorporation of a company. Non-appointment can also attract heavy penalty.

WHY NURTURELABZ

Startup Friendly

Individual attention and single point of contact help us register 1000 plus businesses and its counting.

Satisfied Clients

We strive to achieve total client satisfaction by delivering quality services in professional and time bound manner

Never Miss Deadline Approach

We are committed to meet deadline there by saving your money getting wasted by paying penalties.