A. What is One Person Company (OPC)?
One Person Company (OPC) is a private liability company registered with only one person as its sole owner and shareholder. The concept of One Person Company is introduced in India through the Companies Act, 2013.
One Person Company means a company which has only one person as a member.
An individual who is an Indian Citizen and resident in India can register a Limited Company under the provisions of Companies Act, 2013. One Person Company (OPC) is categorised as a Private Limited Company under Companies Act, 2013. OPC cannot have more than One shareholder at any point of time. Also, an OPC cannot add shareholders to raise further capital.
This category of company is a new creation after the introduction of Companies Act,2013. Basically OPC is a private company with one shareholder. The main features of OPC are;
- Only Individuals those who are Indian Citizen and resident in India can become a Shareholder of One Person Company
- Board may have one or more directors
- Maximum Paid up Share capital of an OPC is Rs.50 lakhs
- Maximum turnover allowed in OPC is Rs.200 lakhs
- Conversion to private limited is only possible after two years of existence.
No person shall be eligible to incorporate more than One (1) OPC or become nominee in more than one such company. In case of a person, being member in OPC becomes a member in another OPC by virtue of his nomination that OPC, he shall vacate / change the membership to meet this criteria within a period of 180 days.
Q. Who Can Register a One Person Company?
A. Individuals those who are Indian Citizen and resident in India can become a Shareholder of One Person Company.
Q. Who Cannot Register a One Person Company?
A. Foreign Nationals and Non Resident Indians’ and Body corporates cannot register a One Person Company.
Q. How many OPCs one Individual can Register?
A. One Individual cannot incorporate more than One (1) OPC or become nominee in more than one such company.
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Requirements for One Person Company - OPC – Registration
One Person Company (OPC) can have only 1(One) Shareholder. The first shareholder should execute the Memorandum and Articles of Association for registering the Company.
Only an individual who is an Indian Citizen and resident in India can register a Limited Company under the provisions of Companies Act, 2013. One Person Company (OPC) is categorised as a Private Limited Company under Companies Act, 2013.
OPC cannot have more than One shareholder at any point of time. Also, an OPC cannot add shareholders to raise further capital. Only Individuals can become shareholder of an OPC. A Company or a LLP cannot register an OPC or become a member of OPC.
2. Nominee Shareholder
At the time of incorporation of OPC, the subscriber to the memorandum of a One-Person Company shall nominate a person as Nominee with his/her prior written consent to become the member of the company in the event of the subscriber’s death or his incapacity to contract. Only an individual is an Indian citizen and resident in India can become nominee for the sole member of a One-Person Company.
Nominee shareholder has to submit a consent to act to become the member of OPC
There should be minimum of One (1) director in a One-Person Company (OPC). Only individuals can be designated as directors of a company. OPC can have more than One Director and the Director(s) need not be shareholder
An individual should hold a valid DIN to become a director of a company. In case of Directors those who do not have DIN, the Ministry of Corporate Affairs, shall allot Directors Identification Number (DIN) to the Director in the process of Company Registration.
4. Digital Signature Certificate
The proposed shareholder of an OPC should have valid Digital Signature Certificate issued by a Certifying Authority (CA) under Information Technology Act 2000. The Nominee shareholder does not require Digital Signature. However,
5. Share Capital of Company
a. Authorised Capital
Authorised Capital or Registered Capital of a company is the upper limit of capital that a company can issue shares and collect money from shareholders. Company registration fee is payable to ROC and will be calculated on the basis of Authorised Capital. There is no requirement as to minimum Authorised Capital for registration of a One Person Company. However, One-Person Company (OPC) can only have maximum Authorised Capital of Rs.50 Lakhs.
b. Subscribed Capital
Subscribed Capital refers to the amount of capital agreed to be brought in by the shareholders to the company. There is no requirement as to minimum Paid-up Capital for registration of Company. However, there must be nominal amount to be subscribed by the first promoters of company. (1 share of Re.1.00 or 1 share of Rs.10.00 etc).
To commence the business of a company after incorporation, a declaration has to be filed with the Registrar of Companies that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him. This declaration has to be filed by the company within a period of 180 days of the date of incorporation of the company in Form No.INC-20A.
c. Paid up Capital
Paid up capital of a company refers to the amount of capital actually brought in by the shareholders to the company. One-Person Company (OPC) can only have maximum paid up capital of Rs.50 Lakhs.
6. Company Name
Company name selection is important for speedy registration of a company. Company Name approval and allotment process in India is administered by the Ministry of Corporate Affairs (MCA) as per the Company Name Availability Guidelines issued under Companies Act 2013.
The name of shall end with the words “(OPC) Private Limited”
7. Registered Office Address
Registered Office refers to the official correspondence address of a company or its principal place of business. The address of the Registered Office will be used for all official communications of the company. At the time of registration of a new Company, there are Two options to record the Registered Office Address:
There are 2 option to the promoters to choose the Registered office address
a. Temporary Address:
Use an address as Temporary Registered Office for Registration and to file the Permanent Address documents within 30 days of Company Registration.
b. Permanent Address:
Use a Permanent Address for the Company at the time of Registration itself and in this case, there is no filing required after the Registration of the Company.
In both the cases, the address refereed on the registration forms shall be recorded in the Certificate of Registration. Any change in address after the Company Registration will not be reflected on the Certificate of Incorporation.
A company must have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. Within 30 days of incorporation the company shall furnish a verification of its registered office to the Registrar of Companies in Form 22.
Execution of Documents and create electronic documents for Filing with MCA
In addition to the Identify and Address documents of shareholders and Directors, the following documents are to be executed by the promoters of Company:
- Consent to Act as Director: Form DIR-2
- Affidavit by Subscriber & Director: INC-9
- Nominee Consent Form : Form INC-3
- No-Objection Letter for Registered office of the Company
- Declaration for Certification of DIN / Engagement Letter to a Professional for Certification.
In case of Company / LLP is a shareholder and / or if the proposed name of Company is similar to an existing company / LLP, the following additional document are also required:
- Documents Required from Company / LLP (If shareholders are Body Corporate)
- Authorisation for execution to an individual for execution of Company Incorporation Documents
- NOC / Authorisation for use of Name / Trademark, if any.
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OPC Registration Process
A. Company Name Application
The applicant has two option to proceed with Company Name Application.
Option 1. Get the Company Name Approval under RUN Application Process and proceed with File an application for Company name approval first and the go for Company Registration; or
Option 2. File the Integrated Company Registration Form (Step B below). The Company name can be reserved through SPICe incorporation process. In case of name application through SPICe form, only one name can be submitted for approval. However, if the first applied name is rejected, the application can be resubmitted 2 more times with alternate names.
B. Filing of Company Incorporation Documents with MCA:
Under the SPICe incorporation process, Company Incorporation Process consists of preparation and filing of the flowing E-Forms:
- e-Form INC-32 - Simplified Proforma for Incorporating Company Electronically (SPICe)
- e-Form INC-33: e-Memorandum of Association (SPICe MoA)
- e-Form INC-34: e-Articles of Association (SPICe AoA)
All the documents executed / notarised / attested as per documentation requirements has to be attached to the e-Form INC-32 / 33/ 34 and the e-Forms has to be digitally signed with the Digital Signature Certificate (DSC) of all the proposed shareholders / representatives.
There is No Registration Fee payable for filing of e-Form INC-32 for all type of Companies if the authorised capital is less than or equal to Rs.10 Lakhs at the time of registration. However, filing fee for e-Form INC-33 / 34 and stamp duty is applicable for registration of any Company.
C. Processing of e-Forms by Central Registrar of Companies (CRC):
The Central Registration Centre (CRC) processes the application and if found the details / documents are in order, the Central Registrar of Companies shall register the Company and issue the following:
- Company Incorporation Certificate
- DIN for Directors
- Permanent Account Number (PAN)
- Tax Collection and Deduction Number (TAN) to the New Company.
Commencement of Business by Company
A company incorporated on or after 02.11.2018 and having a share capital can commence business or exercise any borrowing powers only after complying the following requirements:
1. Filing a declaration with the Registrar of Companies that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of such declaration. This declaration has to be filed by the company within a period of 180 days of the date of incorporation of the company in Form No.INC-20A
2. Filing of INC-22 for verification of its registered office if the company was registered with a temporary address while filing SPICe Form INC-32.
If a company makes any default in complying with the above requirements, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.
If the company has not filed the declaration within a period of 180 days of the date of incorporation of the company, the Registrar may initiate action for the removal of the name of the company from the register of companies on the reasonable belief that the company is not carrying on any business or operations.