OPC Company Registration
You must have heard the quote that the Rich people invest to make more money, while the poor people save their money. Rich people are rich because they put their money to work for them, while poor people put their money in banks for savings, that’s a common saying. Now, India is certainly on the path of making more rich people with its initiatives like startup India, vocal for local etc.
A much commendable step by the Ministry of Corporate Affairs is letting a small business idea taking shape as a company. A company structure solely made for somebody who likes to own their own business single-handedly.
If you are one of them then, One Person Company is ideal for you.
Wanna know how to begin with the OPC company registration process, its requirements and also what not to expect from an OPC, keep reading!
What is OPC in Company Registration?
As the name suggests, OPC means One Person Company. OPCs are those companies that are under the control of a single person. Under the companies act a company will be called an OPC if it fulfils the following criteria.
- The OPC must have one director and one member,
- Another person must be nominated for safeguarding the succession of the company,
- The name of the company must include “OPC’ at its end.
- An OPC can be with or without capital.
Capital Requirement of an OPC
There is no minimum capital requirement to register an OPC.
Now let’s look into the registration process of OPCs.
OPC Company Registration Process
MCA suggests that OPC can be incorporated through Simplified Performs for Incorporating Company electronically in two ways.
- Without filing RUN using SPICe.
- By filing RUN using SPICe.
Incorporation of OPC Without filing RUN using SPICe.
Any OPC can avail these 5 services by applying through the SPICe form no. INC-32, INC-33, INC-34:
- Name reservation,
- Incorporation of a new company,
- Allotment of PAN,
If INC 33 and 34 are not applicable, the pdf attachments of MOA and AOA should be attached. INC-32 enables the company to apply for one name for their company.
Incorporation of OPC by filing RUN using SPICe.
- The company representative can use the RUN service to check for the name availability for their company and apply for the approval of the name.
- Then, the company can file for an incorporation certificate using the SPICe form. The Incorporation must be applied under 20 days after getting the name approval.
- If the address of the correspondence and registered office is not the same, form INC-22 must be applied under 30 days to clarify the same.
The idea to enable a one-person company is to ensure that no small company should seize to exist because of compliance overload or capital. As you can see, registering an OPC is not as complicated a process as other companies.
OPC registration is an online process and can be easily done on the MCA portal. Download the recommended forms, fill them out, register on the portal, attach your DSC and follow the steps as told by the application.
Is Registration Mandatory for OPC?
Yes, Any OPC needs to be registered to get the legal recognition. One person will be the Director of the OPC and requires a DIN and DSC. After that, they can proceed with applying for the incorporation certificate or OPC Registration.
Can OPC be Registered as Start-up?
The fun thing about the start-up India initiative is that a One-Person-Company can register on this platform as a start-up. This will allow it to have all the benefits of a start-up.
What is the Drawback of OPC Company?
Call it a drawback, disadvantage or limitation of an OPC, all of it lies in its very structure. Here are a few points to understand it better.
Not having shareholders.
OPC structure doesn’t allow to have more than one shareholder. This restrains the company to get more funds and capital by giving out their share in return, which is a solid way of building a financial support system for any business.
No Foreign Investors can be part of an OPC.
Only residential Indians are allowed to be part of an OPC; inhibiting more than one shareholder as well as a foreign investor meekly declines the funding prospects for the OPC.
Taxability at 30% excluding surcharge.
The tax liability for an OPC on its earning is 30%. The same interest rate is charged on other forms of companies like LLPs, private companies and public companies which are much bigger than OPC.
Other limitations conjoined with an OPC are:
As OPC is run by one Director, there are chances of making more errors due to a lack of collective experience, which comes through a board of directors in other company formats.
This format is only feasible to execute a small business idea. Once the business starts doing well, it must be upgraded into a private company.
Frequently Asked Questions (FAQs)
Can OPC have Employees?
Yes, an OPC can have as many employees as it needs. However, it can not have more than one shareholder in the company.
Can OPC Raise Funds?
Sadly, an OPC can not raise funds because of its obligation to only have a single shareholder in its company.
Can a Director of OPC Draw Salary?
Yes, the Director of an OPC can draw a salary from its company. The salary is counted under the deductions of the income tax act. The salary will be taxed like any other salary of the employee under the income tax act. The TDS on the salary will be deducted as per the applicable tax slab rates and submitted to the income tax department by the company itself.
Can I Get Loan on OPC?
Yes, the Companies Act allows OPCs to apply for loans from registered banks. An OPC can get a loan from banks to support their business and increase a capital inflow. The interest rates vary from bank to bank.
OPC is formulated to encourage entrepreneurship. OPC company registration process is less complicated, doesn’t require capital and allows a single person to take charge of one whole organization. There are limitations to it but that is not valid for small businesses. OPC is best suited for small capital ventures.
For more information on OPC or assistance in OPC registration, kindly reach out to our professionals at InstaFiling.
Request A Callback
You may Also Call Us At+91 76790 91881