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OPC Company Registration (Useful Guide)

OPC Company Registration (2023 Guide)

OPC stands for One Person Company. It is a type of company registration in India that allows a single person to register and operate a private limited company. The OPC registration process is similar to that of a regular private limited company, but there are certain additional requirements and procedures that must be followed. If you are wondering to know about OPC company registration (useful guide). Read on.

These include appointing a nominee director and obtaining the approval of the Registrar of Companies. Once registered, an OPC has the same legal status and liability protection as a regular private limited company.

What is OPC registration process?

  • The applicant must have a Digital Signature Certificate (DSC) issued by the Certifying Authority to register.
  • The proposed Director is identified by a Director Identification Number (DIN).
  • The SPICe Form requests the DIN along with the Director`s information.
  • The Company’s name will be ABC (OPC) Private Limited.
  • One name for the OPC may be applied for using SPICe, and RUN service will be utilised to check the availability of names (INC 32).
  • Form SPICe for OPC incorporation must be filed within twenty days of the date RUN, or the approval of the name was approved.
  • The SPICe form must be submitted online together with any necessary documentation.
  • At the time of incorporation, the PAN and TAN will immediately create.
  • A COI, or Certificate of Incorporation, will be issued by the Registrar of Companies if it determines that the information and supporting documents are accurate.

What Is the Registration Fee for OPC in India

The registration fee for an OPC in India is determined by the Registrar of Companies (ROC). It may vary depending on the state in which the company is registered. However, generally speaking, the fee is based on the authorized capital of the company and ranges from a few thousand rupees to tens of thousands of rupees.

Additionally, The Indian Ministry of Corporate Affairs (MCA) has fixed the fee for OPC registration as Rs. 2000. The fee is inclusive of all taxes and is valid as of 2021. This fee may change in the future based on the government policies. So it’s best to check with the ROC office or the MCA website for the most up-to-date fee schedule.

It’s important to note that along with the registration fee. There are other expenses such as professional fees for the services of a lawyer or a consultant, and government fees for obtaining various licenses and permits that may be required for the operation of the company.

What Is the Difference between Pvt Ltd and OPC

A private limited company (Pvt Ltd) and a One Person Company (OPC) are both types of legal business entities in India, but there are some key differences between them.

  1. A private limited company can have a minimum of 2 and a maximum of 200 shareholders, while an OPC can have only one shareholder, who is also the director of the company.
  2. Shareholders of a private limited company have limited liability, meaning that their personal assets are protected in case the company goes bankrupt. In an OPC, the liability of the shareholder is unlimited, meaning the shareholder is personally liable for the company’s debts.
  3. The compliance requirements for an OPC are less stringent as compared to a private limited company. For example, OPCs are not required to hold regular board meetings and are not required to file an annual return.
  4. The minimum paid-up capital for an OPC is Rs 1 Lakh, whereas for Pvt Ltd is Rs 2 Lakhs.
  5. An OPC can be converted into a private limited company if it meets the minimum requirements for shareholders and paid-up capital.

How Can I Start OPC Company in India

OPC Company process

Starting an OPC (One Person Company) in India involves several steps and can be done by following these general steps:

Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN): You will need to obtain a DSC and DIN for the proposed director of the OPC. DIN is a unique identification number for directors and DSC is a digital signature required for filing documents with the Registrar of Companies (ROC).

Choose a name for your company: Before registering the company, you need to choose a unique name for your company and apply for the name availability with the Ministry of Corporate Affairs (MCA).

File the Incorporation Documents: File the incorporation documents, such as the Memorandum of Association (MOA) and Articles of Association (AOA), with the ROC. These documents must be signed by the proposed director and the nominee director, who is appointed by the main director in case of his/her incapacity.

Get the Certificate of Incorporation: Once the ROC is satisfied with the documents, it will issue a certificate of incorporation, which is the legal proof of the company’s existence.

Obtain PAN and TAN: Apply for PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) for the company from the Income Tax Department.

Get licenses and permits: Depending on the nature of your business, you may need to obtain licenses and permits from the relevant authorities.

Who Is Eligible for OPC

In India, an individual who is an Indian citizen and resident in India is eligible to register as the sole director and shareholder of an OPC (One Person Company). The following are the criteria for eligibility to register an OPC:

  1. The Person must be an Indian citizen and resident in India.
  2. The individual must not be a minor or a person of unsound mind.
  3. The Person must not be a disqualified person as per the Companies Act, 2013.
  4. The individual must not be a director in any other company, at the time of incorporation of OPC or during the preceding three financial years.
  5. That person must not have any unpaid debts or defaults with any financial institution or bank.

What Are the Benefits of OPC Company

There are many benefits to running One person company:

Easy to manage:

OPC can be set up and operated by one person, making business management easier. Decisions are easy and the decision-making process is quick. Ordinary and special resolutions are easily passed by members and signed by individual members. Therefore, there are no conflicts or delays within the company, and it is easy to operate and manage the company.

Perpetual succession:

OPC is characterized by the fact that even one member is inherited forever. Once the OPC is approved, individual members must nominate candidates. After the member’s death, the candidate will run the company in their place.

Legal status:

OPC receives its own legal entity status from its members. The OPC’s separate legal entity protects the individual who created the OPC. Member’s liability is limited to his shares and he is not personally liable for any loss to the company. therefore creditors can sue the OPC, not the members or directors.

Easy to obtain money:

Since OPC is a private company, it is easy to raise funds through venture capital, angel investors, and incubators. Banks and financial institutions prefer to lend to businesses over corporations. This makes it easier to receive funds.

Fewer compliances:

The Companies Act 2013 provides for certain exceptions to his OPC in relation to compliance. OPC is not required to produce a cash flow statement. The company secretary is not required to sign the books of accounts or annual reports and be signed only by the director. 

Easy incorporation:

Onboarding OPC is easy as the only member and nominee required for onboarding. A member can also be a director. The minimum authorized capital to raise an OPC is Rs.1 lakh, but there is no minimum paid-up capital requirement. Therefore, it is easier to set up than other legal forms.

What Is the Minimum Capital for OPC

The minimum paid-up capital for an OPC (One Person Company) in India is Rs. 1 Lakh. This means that the sole shareholder of the OPC must contribute at least Rs. 1 Lakh as capital to the company at the time of its registration. This capital can be in the form of cash or kind.

OPCs are also required to maintain a minimum paid-up capital of at least Rs. 1 Lakh at all times. If the paid-up capital of the OPC falls below Rs. 1 Lakh, the company must take steps to increase it to that level within six months of the fall.

What are disadvantages of OPC?

Disadvantages of OPC (One Person Company):

High taxes

For corporations, flat rate tax is not available. Depending on your salary, you must pay 10%, 20% or 30% of your salary as personal tax. However, sole proprietors are subject to 30% income tax.

Cost consistency

Partnership or own company compliance costs are very low compared to sole proprietorships. 

OPC is part of the name

You must indicate that you are a sole proprietorship in parentheses after the company name. The perception that the organization is run by one person of hers is greatly diminished. Conversely, if you start with a small number of people, you will not be able to restrict management and you will be able to impress your customers. 

Individual management

The sole shareholder is the shareholder that controls everything. An individual’s decision-making authority determines the company’s success and expansion.

OPC can be embedded

A single shareholder can use OPC (One Person Company). If you need to set up another company like OPC, it is not allowed. In today’s fast-paced economy, having multiple businesses can diversify your income and protect you from serious losses.

There is currently no safe trade flow.

Not suitable for high turnover

A general partnership can purchase immediate conversion to a limited liability company. If you estimate that your company has a high turnover rate, or indeed has a high turnover rate, you may be better off setting up a limited liability company than a sole proprietorship. Forming an OPC or possibly converting a sole proprietorship into a limited liability company is not a wise idea. 

Frequently Asked Questions (FAQs):-

Can I register OPC myself?

Yes, you can register an OPC (One Person Company) yourself. The process typically involves submitting the necessary paperwork and fees to the Registrar of Companies (ROC) in the state where the OPC will be registered.

Can OPC write Pvt Ltd?

An OPC (One Person Company) is a type of company that is registered under the Companies Act 2013 in India, it can add “OPC” or “One Person Company” to its name but It cannot use the term “Private Limited” as a part of its name. 

Is OPC better than sole proprietorship?

Whether an OPC (One Person Company) is better than a sole proprietorship depends on the specific circumstances and needs of the individual. Both OPCs and sole proprietorships have their own set of advantages and disadvantages

Closing up

Now you know about OPC company registration (useful guide). The OPC registration process is similar to that of a regular private limited company, but there are certain additional requirements and procedures that must be followed.

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