One Person Company

One Person Company

What is a One Person Company (OPC)?

In 2013, the Companies Act, 2013 introduced the concept of a 'One Person Company (OPC)'. This created an entirely new set of opportunities for budding entrepreneurs who can start a business single-handedly by creating their own single-person economic entity. A one-person company (OPC) is a refinement of a sole proprietorship.

In an OPC, a single promoter gains complete control of the company, limiting his or her liability for contributions to the enterprise. However, a director nominee is present but has no authority until the real director is unable to continue. According to Section 2 (62) of the Company's Act 2013, a company can be formed with only one director and one member. A One Person Company Registration in India is a type of entity with fewer compliance requirements than any other type of company. An OPC is simple to manage because it is run by a single person. If you are an entrepreneur looking for a one-of-a-kind success, you can register as an OPC in India.

Types of OPC

• OPC limited with guarantee
• OPC limited with share Capital
• OPC unlimited Company

OPC Company Registration Documents

• Each prospective partner's self-attested PAN card must be utilised to complete the One Person Company Registration Process.
• The Self-attested address proof must include the Partner's name as it appears on their
• For Indian citizens, self-attested passports, election cards or voter identification, Aadhaar cards, or any other form of identity verification is acceptable and is included in the One Person Company Registration documentation.
• The Self-Attested Partner's Ownership Proof must include the most recent Electricity Bills, Telephone Bills, Gas Bills, Mobile Bills, or any other utility bills from the company's location that are no more than 2 months old.
• And most recent two passport-size photos.
• All directors and members are required to provide two months’ worth of bank statements.

Registration Criteria for OPC Companies

• There must be only one shareholders and only one directors.
• An OPC must have only one directors and must be an Indian citizen.
• There is no minimum capital requirement.
• There is no continued existence allowed in One Person Company Registration.

Benefits of OPC Registration

OPC is the only corporate entity in India that can be operated by a single promoter with limited liability protection, ensuring the business's perpetual existence as well as easy ownership transferability.

In the event of the original director's incapacity or death, the only owner of the OPC shall nominate another person who is an Indian resident In the event of the original director's incapacity or death, the only owner of the OPC shall nominate another person who is an Indian resident The incorporated OPC has "perpetual succession," or continuous existence until legally dissolved. Because the company has its own legal existence, it is unaffected by the death or departure of any of its members and continues to exist regardless of changes in ownership.

In OPC, ownership can be transferred by changing the nominee director's information, shareholding, or directorship, or by signing, filing, and transferring share certificates and share transfer forms, which are sufficient to transfer the company's ownership.

Due to the requirement that an OPC have its books audited annually, it has greater credibility among vendors and lending institutions. Venture capital, financial institutions, angel investors, and other sources of funding are readily available. It is clear that banks and other financial institutions prefer to provide funding to corporations rather than partnership firms or proprietary concerns that require very little ROC filing to be registered with the Registrar of Companies.

A company with artificial person status is allowed to acquire, own, enjoy, and alienate property in its name, such as buildings, intangible assets, factories, residential property, and so on, and can claim any ownership of the company while serving as the nominee director.

Minimum Requirements for OPC Registration

The minimum requirements that are needed to comply for the registration of a one person company are as follows:

• For Incorporating a One Person Company, only a single individual who is both a citizen and resident of India is required. Further, the term Resident of India means that the said person must have lived in India for a time period, not less than 182 days in the previous financial year.
• Business Models such as a Company or an LLP cannot join a One Person Company.
• The promoter should select a nominee at the time of incorporation.
• The minimum authorized capital must be at least Rs 1 Lakh.
• An OPC is restricted from functioning a minor as its member.
• One thing which is noteworthy to note is that if an OPC surpasses an annual turnover of Rs 2 crore or has the paid-up share capital more than Rs. 50 lakhs, then, in that case, it must be converted into a private limited or a public limited within six months.
• There must be at least one nominee and one director.

Forms Required for OPC Registration

The following listed forms must be filed to complete the process of One Person Company Registration:

• Application for the Company Registration
• Digital Signature Form
• Declaration of Promoter in the form INC-9
• Declaration of the Promoter-Non-Deposit under the FEMA (Foreign Exchange Management Act) and SEBI (Securities Exchange Board of India)
• Consent of Director in the form DIR-2
• Consent of Director in the form DIR-2
• MOA (Memorandum of Association) and AOA (Article of Association) Subscriber Sheet
• No-Objection from the actual owner

Documents Required for OPC Registration

The documents required for the registration of a One Person Company in India are as follows:

• Copy of the owner’s PAN (Permanent Account Number) Card
• Passport-sized photograph of the concerned owner
• Copy of the Aadhaar Card or Voter identity card or Driving License of the concerned owner
• Copy of the Rent agreement (If in case a rented property)
• Electricity Bill or Water Tax Receipt of the Registered Office
• Copy of the Property papers or the ownership proof (In the case of an owned property)
• No-Objection Certificate from the actual owner

What are the Taxation Rules applicable to a OPC?

The taxation rules applicable to a one person company are mentioned below:

• It is mandatory for the company to file Income Tax Returns.
• TDS (Tax Deducted at Source) is to be filled for all the quarters by mentioning the TAN.
• Getting an ESI (Employee State Insurance) registration is compulsory for an OPC if in case it employs more than ten persons.
• Under the tax rates slab, the income of an OPC is taxed at 30 percent of its entire income in the financial year

What are the Exemptions available after OPC Registration?

The following listed are the exemptions available after obtaining OPC Registration:

• Sign on Annual Returns
• Hold Annual General Meetings (AGM) and Board Meetings (BM).
• Sign on the Company’s Financial Statements.
• Option to give out with the requirement of conducting an AGM
• Power of the Tribunal to call meetings of its members.
• Calling of EGM (Extraordinary General Meeting).
• Notice of the meeting.
• Statement to be annexed with the notice.
• Quorum for meetings.
• Chairman of meetings.
• Proxies
• Restriction on voting rights.
• Voting by show of hands.
• Voting by electronic means.
• Demand for poll.
• Postal ballot.
• Circulation of the members’ resolution

Mandatory Annual Compliances for One Person Company

The mandatory annual compliances to be followed by a One Person Company have been listed below:

• Minimum 2 Board Meetings are required as per the Companies Act, 2013
• Statutory Audit by a Practising Chartered Accountant
• Appointment of Auditor
• Filing of ITR (Income Tax Return)
• Power of the Tribunal to call meetings of its members.
• Annual filings to the ROC (Registrar of Companies)
• Maintaining Minutes and Statutory Registers
• Form AOC-4 for the financial statement
• MGT-7 for an annual return