Simplified 6-Steps for One Person Company Registration in India

The One Person Company (OPC) offers an attractive alternative that enables you to create your own company with all the benefits of limited liability while retaining sole ownership and control.
If you always like to maintain complete ownership on your company, a One Person Company could be the perfect choice for you!

Introduction

A One Person Company (OPC) is a business structure in which a single person can operate as a company, and also provides the benefits of limited liability. In an OPC, the individual acts as both the director and shareholder, and receives 100% of the company’s profits. The main objective behind creating OPCs was to promote entrepreneurship and encourage the formalization of Micro, Small, and Medium Enterprises (MSMEs).

This concept of OPC registration in India was first introduced under the Companies Act of 2013, where Section 2(62) of the Act, a company can be formed with just one director and one member, and these roles can be filled by the same person, and thus can enjoy the advantages of both a sole proprietorship and a traditional company structure. The decision-making process is simple and in control of the individual, as all decisions are made by the sole shareholder only.

Registration of One Person Company

The SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form is used to register OPC in India. This consolidated form has replaced the earlier forms required for company incorporation.
This SPICe+ form can be filed online through the Ministry of Corporate Affairs (MCA) portal and is divided into two parts:

Part A: This section is used to obtain approval for the company name and to apply for the Director Identification Number (DIN) or Permanent Account Number (PAN) of the proposed director.
Part B: This section is used for incorporation-related details such as the registered office address, share capital, details of the director, and details of the shareholder.

Minimum Requirements for One Person Company Registration

• There must be at least one shareholder and one director in the company, though both of them can be the same individual.
• A Nominee must be appointed before incorporation, with their consent obtained using Form INC-3.
• The minimum authorized share capital must be Rs. 1 lakh.
• Only Indian residents can be shareholders and nominees, and ‘resident’ here stands for the person who has stayed in India for at least 182 during the immediately preceding one financial year.
• All directors must have a Director Identification Number (DIN).
• A Digital Signature Certificate (DSC) is required for one promoter and one witness.

One Person Company Documents Required for Registration

To register a One Person Company (OPC), you will need to provide several essential documents. These include:

• The PAN card and Aadhaar card of both the director and the shareholder.
• Passport-size photographs of the director and the shareholder.
• Address proof for both the director and the shareholder.
• A No Objection Certificate (NOC) from the owner of the registered office.
• The rental agreement for the registered office, if it is a rented property.
• Utility bills for the registered office, which must not be older than two months.
• The Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
• A Digital Signature Certificate (DSC) for both the director and the shareholder.
• The Director Identification Number (DIN) for the director.

Detailed Registration Process for One Person Company (OPC)

1. Obtain Digital Signature Certificate (DSC)
The first step in registering an OPC is to obtain a Digital Signature Certificate (DSC) for the proposed director and shareholder. The DSC is necessary for digitally signing various forms and documents submitted to the Ministry of Corporate Affairs (MCA) in order to ensure their authenticity. To get a DSC, you need to identify a Certifying Authority (CA) authorized by the Controller of Certifying Authorities (CCA), and then submit the required documents, as mentioned above, to complete the verification process. After verifying, CA will issue the DSC.

2. Director Identification Number (DIN)
The next step in the registration process is to obtain a DIN for the proposed director. It is basically a unique identification number necessary for all directors. To apply for a DIN, you have to use Form DIR-3 on the MCA portal, attaching identity proof, address proof, and a passport-sized photograph. To fill e-form DIR-3, instructions are also given on MCA Portal. Once the application is reviewed and approved by the MCA, the DIN will be issued to the director.

3. Name Reservation
Every company has to reserve a unique name to avoid legal issues and ensure distinct identity. You can apply for name reservation through the MCA portal by submitting Form SPICe+ (Part A). You need to propose up to two names and mention the main objectives of the company. The MCA will check the availability and distinctiveness of the proposed names. If the name is rejected, you can reapply with new names using the same form. Thus it is advisable to conduct a preliminary search before to avoid rejections and select a name that reflects the company’s business activities and branding strategy. You can avail help in finding availability of company name from here.

4. Preparation of MOA and AOA
The Memorandum of Association (MOA) and Articles of Association (AOA) are basic documents in defining the company’s structure, objectives, and internal governance. The MOA states company’s objectives, scope, and authorized capital. On the other hand, AOA contains the internal rules and regulations governing the company that specifies the roles and responsibilities of directors and shareholders. It is essential to draft the MOA and AOA, and attach the DSC of the director and the witness to these documents.

For drafting MOA and AOA, you can visit our website as well and contact us for any legal support.

5. Filing of Forms
This step involves consolidating all the previous steps into the formal application for company registration. First, you need to complete the SPICe+ Form, attach the DSC of the director and shareholder, MOA, AOA, and other necessary documents, and then submit the application online through the MCA portal. Second, there is a prescribed fee (both government charges and professional fee) that you have to pay. However, it varies with OPC’s authorized share capital.

One Person Company Registration fee at Lawgical Adda:

6. Issuance of Certificate of Incorporation
The final step is the issuance of the Certificate of Incorporation. The Registrar of Companies (ROC) reviews the submitted forms and documents. Upon satisfaction, the ROC issues the Certificate of Incorporation, which includes the Company Identification Number (CIN). This certificate confirms the establishment of the OPC and gives legal recognition, allowing the business to commence operations officially.

By following these steps and understanding the purposes and processes involved, you can ensure a smooth and efficient registration of your One Person Company. The estimated processing time to register OPC is 10-15 working days.

Click here to register your OPC hassle-free with Lawgical Adda, today!

FAQs

1. Can I register an OPC by myself?
   Absolutely, registering an OPC is possible on your own. The Ministry of Corporate Affairs (MCA) provides a user-friendly online portal that streamlines the registration process. This empowers you to navigate the steps independently and submit the necessary forms electronically. However, drafting the MOA & AOA and understanding legal nuances can be tricky. Consider a professional for a smoother process and to ensure compliance.
2. Can the nominee in an OPC withdraw his/her consent?
   In an OPC, the nominee can absolutely withdraw their consent. The nominee simply needs to submit a written notice to both the sole member of the OPC and the OPC itself. This written notice formally expresses their withdrawal of consent to act as the nominee. Upon receiving this notice, the sole member has a responsibility to act. They have 15 days to appoint a new nominee for the OPC.
3. How long does it take to register a One Person Company (OPC) in India?
   The OPC registration process in India can be completed in approximately 10 days, but it’s important to consider this as an estimated timeframe. The actual duration can be influenced by various factors, such as departmental workloads and the complexity of your application.
4. How do I convert an OPC to a Private limited company?
   An OPC can be easily converted voluntarily into a private limited company. You’ll need to formally increase the minimum number of directors and members in your OPC to two. Subsequently, a special resolution authorizing the conversion must be passed during a designated meeting. Finally, to ensure a smooth transition, written No Objection Certificates (NOCs) from your creditors are required.
5. What is the difference between OPC & LLP in India?
   Both OPC and an LLP offer limited liability protection, but their structures differ. OPCs are ideal for solopreneurs, as only one person can be the owner and director. LLPs, on the other hand, are suited for partnerships, allowing you to share ownership and decision-making with multiple partners. Tax implications also vary. OPCs are taxed as companies, while LLPs can choose to be taxed as a separate entity or as a pass-through, where profits and losses flow directly to the partners’ personal tax returns. Finally, OPCs have stricter compliance requirements compared to LLPs, which offer more flexibility in internal governance.