Your One Person Company with Targolegal
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Step 1
Apply for name reservation
Step 2
Apply for DIN and Digital Signature Certificate (DSC ) for the sole shareholder
Step 3
Drafting the Memorandum of Association (MOA) and Articles of Association (AOA)
Step 4
Filing the required forms with Ministry of Corporate Affairs (MCA)
Step 5
Receiving the Certificate of Incorporation from MCA
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
What is an OPC (One Person Company)
With the implementation of the Companies Act, 2013, a single person could constitute a Company, under the One Person Company (OPC) concept.
The introduction of OPC in the legal system is a move that would encourage corporatisation of micro businesses and entrepreneurship.
One Person Company (OPC) is another form of organization newly provided under the Companies Act, 2013 , wherein, the entity can be incorporated with a single member.
A One Person Company is incorporated as a Private Limited Company. It must have only one member at any point of time and may have only one Director. The member and nominee should be natural persons , Indian citizens and resident in India.
Features of an OPC
It has all the protection and responsibilities as available to a Private limited Company, with the major change, that the number of shareholders who are required to incorporate the Company is one (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 into a private limited company voluntarily, once the Company has been in operation for a certain period of time.
Difference between a Sole Proprietorship and an OPC
A one-person company is different from a sole proprietorship because it is a separate legal entity that distinguishes between the promoter and the company.
The promoter’s liability is limited in an OPC in the event of a default or legal issues. On the other hand, in case of sole proprietorships, the liability is not restricted and extends to the individual and his or her entire assets.
A One person company shall have a minimum of one (1) director. Therefore, a One Person Company shall be registered as a private limited company with one member and one director. By virtue of section 3(2), an OPC may be formed either as a company limited by shares or a company limited by guarantee; or an unlimited liability company.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Importance Of Registration
The concept of One person company is quite revolutionary. It gives the individual entrepreneurs all the benefits of a company, which means they will get credit, bank loans, access to market, limited liability, and legal protection available to companies.
Prior to the new Companies Act, 2013 coming into effect, at least two shareholders were required to start a company.
But now the concept of One Person Company would provide tremendous opportunities for small businessmen and traders, including those working in areas like handloom, handicrafts and pottery. Earlier they were working as artisans and weavers on their own, so they did not have a legal entity of a company.
But now the OPC would help them do business as an enterprise and give them an opportunity to start their own ventures with a formal business. structure, Further, the amount of compliance by a one person company is much lesser in terms of filing returns, balance sheets, audit etc. Also, rather than the middlemen usurping profits, the one person company will have direct access to the market and the wholesale retailers. The new concept would also boost the confidence of small entrepreneurs.
Benefits of registration as an OPC
i) Limited Liability
Starting up an OPC firm provides the promoter full control over the company while limiting his/her liability.
ii) Concentrated Control
Control of the business rests with the director and shareholder who invariably would be the promoter.
iii) Relaxed Compliance Framework
OPC has fewer compliances and legal restrictions, compared to private limited companies.
iv) Perpetual existence
OPC will survive if the founder is willing to nominate a successor by making him/her a nominee.
v) Minimal Restrictions for OPC registration
Compared to other forms of business incorporating a one-person company in India 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.
vi) Flexible Tax Regime
One Person Company can enter into a 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.
vii) 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.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Registration Conditions
Only natural persons who are Indian citizens and residents are eligible to form a one-person company in India. The same condition applies to nominees of OPCs. Further, such a natural person cannot be a member or nominee of more than one OPC at any point in time.
There is no minimum Capital required to start an OPC Private Limited Company. So, even with zero registered capital, an OPC can be incorporated and can start doing business.
OPC may be either a company limited by shares or a company limited by guarantee or an unlimited company.
The Director of the Company should have a Director Identification Number (DIN) and the subscriber has to procure a Digital Signature (DSC) for One Person Company (OPC) registration.
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Documents Required
Documents Required For OPC Registration
You need to have the following set of documents before proceeding for registration:
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Minimum 1 person as Director.
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Minimum 1 Nominee
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PAN Card Copy of Director and Nominee
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Proof Of Identity of Director and Nominee (Passport/Driving Licence/Voters ID)
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Proof of Residence of Director and Nominee(Bank Statement/Electricity Bill/Telephone Bill/Mobile Bill)
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Address proof of the proposed Registered Office (Electricity Bill/ Property Tax Receipt/Postpaid Mobile Bill, Gas bill)
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NOC from the person who owns the property mentioned above.
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2 passport size photos of the proposed Director and Nominee.
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Personal mobile number of the proposed Director
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Personal E-mail Address of the proposed Director
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Educational qualification of the proposed Director
Other details required for OPC registration.
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Main Objective of the Company- Proposed activities of the company
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Proposed names for your company
Overview
Importance of Registration
Registration Conditions
Incorporation Process
Documents Required
Incorporation Process
Apply for Name reservation:
The first step in incorporation is to reserve/approve the name of the company. The name should be unique and should not be similar to any other existing company and trademark.The proposed name selected should not contain any word which is prohibited under Companies Act, 2013.
Apply for Digital Signature Certificate (DSC)
The application for OPC is filed online and it is mandatorily required to be signed by the director and shareholder of the company. So DSC is mandatorily required to be taken by the directors and shareholder of the company, who is required to sign the e-form for registration before filing incorporation application for the company.
Apply for Director Identification Number (DIN):
It is a unique identification number to the director issued by Registrar of the companies (ROC) for becoming a director in India. If proposed directors already have approved DIN then that will be used and if proposed directors do not have approved DIN then DIN will be approved simultaneously with Registration of company.
Apply for PAN & TAN of the company:
PAN and TAN are simultaneously applied along with company registration forms and are mentioned in Certificate of Incorporation.
Document submission:
Application for registration of the OPC is made to the Registrar of Companies (ROC) along with Memorandum and Article of Associations, declaration, affidavits etc.
Allotment if Certificate of Incorporation (COP):
ROC then scrutinizes the incorporation form and documents, if ROC finds the documents are in order, issues Certificate of Incorporation which is the Registration certificate of OPC. After receiving the certificate of Incorporation the OPC is set to roll out its function.
Opening of Bank Account:
On submission of Certificate of Incorporation & other essential documents, prescribed bank will open a current account in the name of the company.
The process of incorporation can be done in online mode and it takes about 10-15 working days to complete the process, from the date of submission of all required documents , and subject to the availability of the proposed name.
Compare your options before going for OPC registration
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 before starting a one-person company in India or opting for Proprietorship registration in Bangalore.
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 Person
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
es, 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 Person
NA
Individual income tax slab of the 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
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?
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
es, Partnership can be converted into a Private Limited Company or LLP.
NO
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 Person
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
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 Person
NA
Individual income tax slab of the 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
FAQ
What is a One Person Company (OPC)?
A One Person Company (OPC) is a type of business entity that allows a single person to operate a company. It is a hybrid structure combining the benefits of a private limited company with the flexibility of a sole proprietorship. The key feature of an OPC is that it can have only one shareholder and one director, making it ideal for solo entrepreneurs.
What are the advantages of registering a One Person Company (OPC)?
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Limited Liability: The personal assets of the sole member (owner) are protected from the company's liabilities.
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Separate Legal Entity: An OPC is considered a separate legal entity, distinct from its owner.
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Easy Conversion: An OPC can be converted into a private limited company once it exceeds the prescribed turnover or shareholder limits.
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No Minimum Capital Requirement: There is no prescribed minimum capital requirement to form an OPC.
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Full Control: The sole member enjoys full control over the business decisions without the need for a second shareholder.
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Tax Benefits: OPCs enjoy tax exemptions and deductions similar to private limited companies.
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Perpetual Succession: The OPC continues to exist even if the owner dies or is incapacitated. The nominee director takes over in such cases.
Who can form a One Person Company?
Any individual who is:
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A resident Indian (a person who has stayed in India for at least 182 days during the preceding year).
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At least 18 years old and legally capable of entering into a contract.
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Not a nominee of another OPC. A person can form only one OPC, and they must also nominate a second person (nominee) who will take over the business if the original owner dies or becomes incapacitated.
What are the requirements to register a One Person Company in India?
To register an OPC in India, the following requirements must be met:
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Minimum 1 Director: The OPC must have only one director.
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Minimum 1 Shareholder: The company can have only one shareholder (who can also be the sole director).
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Nominee for the OPC: The sole member must nominate a nominee who will take over in case of death or incapacity of the sole member.
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Registered Office: A registered office address in India is mandatory for the OPC.
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Digital Signature Certificate (DSC): The director must have a DSC to sign the incorporation documents.
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Director Identification Number (DIN): The sole director must obtain a DIN.
What is the process of registering a One Person Company?
The process for registering an OPC in India involves the following steps:
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Obtain Digital Signature Certificate (DSC): The first step is for the director to obtain a DSC.
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Apply for Director Identification Number (DIN): The director must apply for a DIN.
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Choose the Company Name: Select a unique name for the OPC that complies with the naming guidelines of the Ministry of Corporate Affairs (MCA).
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Draft Memorandum and Articles of Association (MOA & AOA): These documents define the company’s objectives and rules.
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File with the MCA: Submit the incorporation documents (MOA, AOA, and the DIN) to the Ministry of Corporate Affairs for approval.
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Obtain Certificate of Incorporation: Once the documents are verified, the MCA issues the Certificate of Incorporation, marking the company’s registration.
What are the documents required for One Person Company registration?
The required documents for OPC registration are:
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Identity Proof: Aadhar card, passport, voter ID, or driver’s license of the director and nominee.
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Address Proof: Recent utility bill (electricity, water, or gas bill), bank statement, or property tax receipt.
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Photographs: Passport-sized photographs of the director and nominee.
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Proof of Registered Office: Rent agreement or property ownership document, along with a recent utility bill in the name of the owner.
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Signed MOA and AOA: Memorandum of Association (MOA) and Articles of Association (AOA) for the company.
How long does it take to register an OPC in India?
The registration process for a One Person Company usually takes around 10 to 15 working days. The time may vary depending on factors like document verification, name approval, and other formalities.
Can a foreigner or a foreign company form a One Person Company in India?
Yes, a foreigner or a foreign company can form a One Person Company in India, provided:
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At least one director must be an Indian resident.
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The sole shareholder can be a foreigner, but the nominee must be an Indian resident.
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The OPC must adhere to the foreign direct investment (FDI) regulations, if applicable.
Is there any minimum capital requirement for OPC registration?
No, there is no minimum capital requirement for registering a One Person Company in India. The company can be started with any amount of capital, and it can be increased later as required.
Can the One Person Company have multiple directors?
No, a One Person Company can have only one director. However, it is mandatory for the company to appoint a nominee who will become the new director in case of the sole member's death or incapacity.
What is the role of the nominee in OPC registration?
The nominee is an individual who is appointed by the sole member at the time of registration. The nominee will take control of the company in case the original member dies or becomes incapacitated. The nominee must be an Indian citizen and a resident of India.
What are the compliance requirements for an OPC?
OPCs in India are required to comply with various regulatory requirements, including:
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Annual Filing: OPCs must file annual returns and financial statements with the Ministry of Corporate Affairs (MCA).
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Annual General Meeting (AGM): Unlike other companies, OPCs are not required to hold an AGM.
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Board Meetings: An OPC must hold at least one board meeting every 6 months.
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Maintaining Books of Accounts: OPCs must maintain proper books of accounts and financial records.
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Tax Filings: OPCs are required to file income tax returns, GST returns (if applicable), and other necessary tax filings.
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Statutory Audits: OPCs with a turnover exceeding ₹2 crores must undergo a statutory audit by a qualified auditor.
What happens if the sole director of an OPC resigns?
If the sole director of an OPC resigns, the company must appoint a new director within 30 days. If no new director is appointed, the company could face penalties or may be struck off from the MCA records. The appointment of a new director must be done by the sole member, and the necessary documents must be filed with the MCA.
What is the liability of the sole member and director in an OPC?
The liability of the sole member and director in an OPC is limited to the amount of unpaid share capital. The personal assets of the member and director are not at risk in case of the company’s debts or liabilities, except in cases of fraud or other illegal activities.
What is the cost of registering a One Person Company in India?
The cost of registering an OPC varies depending on the service provider and the complexity of the process. On average, the registration cost can range from ₹7,000 to ₹15,000 for basic registration. Additional costs may include professional fees, stamp duties, and government charges.
Can an OPC be converted into a private limited company or public limited company?
Yes, an OPC can be converted into a private limited company or a public limited company if it meets the following conditions:
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The paid-up capital exceeds ₹50 lakh, or
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The average annual turnover exceeds ₹2 crore. The conversion process involves submitting an application to the Ministry of Corporate Affairs (MCA) and following the necessary legal steps.
What are the taxes applicable to a One Person Company?
OPCs in India are subject to the following taxes:
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Corporate Tax: OPCs are taxed at the rate of 25% (if turnover is less than ₹400 crore) or 30% (if turnover exceeds ₹400 crore).
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Goods and Services Tax (GST): OPCs engaged in the supply of goods and services may be required to register for GST if their turnover exceeds the prescribed threshold.
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Tax Deducted at Source (TDS): OPCs must deduct TDS on applicable payments (e.g., salaries, professional fees, etc.).