Benefits of OPC Registration in India

The registration of a One Person Company (OPC) offers numerous advantages for entrepreneurs. Here are some key benefits associated with OPC registration:

1. No Minimum Capital Requirement
   There is no prescribed minimum capital requirement for registering a One Person Company. However, the maximum authorized capital for an OPC cannot exceed Rs. 50 lakhs at any point in time.

2. Limited Liability
   One of the most significant advantages of an OPC is limited liability. This means that the director's liability is restricted to the amount of capital invested in the business. As a result, the director’s personal assets are safeguarded in case the company faces financial difficulties.

3. Fewer Compliance Requirements
   OPCs are subject to fewer compliance requirements compared to other types of companies. The registration process is straightforward, and the paperwork involved is minimal, making it easier to set up and manage.

4. Perpetual Succession
   An OPC enjoys perpetual succession, meaning that the company continues to exist even if the director dies, falls ill, or becomes incapacitated. In such cases, the nominated member takes over the role of director, ensuring the company’s continuity.

5. Greater Credibility
   Since an OPC is required to have its financial statements audited annually, it enhances the company’s credibility. This, in turn, boosts consumer confidence, vendor satisfaction, and business reputation.

6. No Legal Disputes
   Registering as an OPC eliminates the potential for legal disputes between the director and third parties, as the company is legally distinct from its owner.

7. Privileges for Small Scale Industries
   OPCs qualify for several privileges available to small-scale industries, such as easier access to funding, lower interest loans, and benefits under the Foreign Trade Policy. These advantages are crucial for the growth and expansion of a One Person Company, especially during its early stages of operation.

Minimum Requirements for OPC Registration

The following are the minimum requirements that must be met for registering a One Person Company (OPC):

1. Single Individual Requirement
   To incorporate an OPC, only one individual is required, and this person must be a citizen and resident of India. A "resident of India" refers to a person who has lived in India for at least 182 days in the previous financial year.

2. Business Models Exclusion
   A One Person Company cannot have another company or LLP (Limited Liability Partnership) as its member.

3. Nominee Selection
   The promoter must nominate a nominee at the time of incorporation. The nominee will become the member in case of the director’s incapacity or death.

4. Minimum Authorized Capital
   The minimum authorized capital required for OPC registration is Rs. 1 Lakh.

5. Minor Exclusion
   A minor cannot be a member of a One Person Company.

6. Conversion Requirement
   If the OPC exceeds an annual turnover of Rs. 2 crores or has paid-up share capital exceeding Rs. 50 lakhs, it must be converted into a Private Limited or Public Limited company within 6 months.

7. Directors and Nominees
   The OPC must have at least one director and one nominee.

Forms Required for OPC Registration

The following forms need to be filed to complete the OPC registration process:

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

Documents Required for OPC Registration

The following documents are needed for OPC registration in India:

• Copy of PAN Card of the owner
• Passport-sized photograph of the owner
• Copy of Aadhaar Card, Voter ID card, or Driving License of the owner
• Copy of Rent Agreement (if the property is rented)
• Electricity Bill or Water Tax Receipt for the registered office
• Property Papers or Ownership Proof (if the property is owned by the owner)
• No-Objection Certificate from the property owner (if the property is rented)

Procedure for OPC Registration

Step 1: Apply for DSC and DIN
The first step in registering a One Person Company (OPC) is to obtain the Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the proposed director. The required documents for obtaining DSC are:

• Aadhaar Card of the proposed director
• Address Proof of the proposed director
• Recent Photograph of the director
• Email ID and Phone Number of the director
• PAN Card of the director

After obtaining the DSC, the next step is to apply for the Director Identification Number (DIN). This can be done by filing the SPICe Form, which includes the identity and address proof of the proposed director. Note that if the director is already identified, there's no need to file Form DIR-3 separately. The DIN can be applied directly within the SPICe form for up to three directors.

Step 2: Application for Name Approval
Once you have obtained the DSC and DIN, the next step is to select and apply for the company's name. The company name should follow the format: XYZ (OPC) Private Limited. To get approval for the name, you need to file the SPICe+ 32 form. The name approval application should include only one preferred name. If the first name is rejected, you can submit a new name by filing another SPICe+ 32 form. Once the name is approved by the Ministry of Corporate Affairs (MCA), you can proceed to the next step.

Step 3: Prepare Essential Documents
After the name is approved, you need to gather the required documents for submission to the Registrar of Companies (ROC). These documents include:

• MOA (Memorandum of Association): Details the objects and goals of the proposed company.
• AOA (Articles of Association): Lays down the by-laws and operational framework of the company.
• Nominee Consent: Since there is only one director, a nominee must be designated who will take over in case of the director’s incapacity or death. This consent must be provided in Form INC-3 along with the nominee’s PAN card and Aadhaar card.
• Director’s Consent: A declaration by the proposed director, filed in Form DIR-2, and a declaration of compliance in Form INC-9.
• Registered Office Proof: Provide proof of the registered office (such as a rent agreement or ownership proof), and a No Objection Certificate (NOC) from the property owner.
• Expert Declaration: A declaration by a professional (such as a Chartered Accountant or Company Secretary) certifying that all compliances have been met.

Step 4: Filing the Forms with MCA
Once all the required documents are gathered, they must be attached to the SPICe+ Form, along with the SPICe-AOA and SPICe-MOA. The forms should be signed digitally by the expert and the director, and then uploaded to the MCA portal for approval. Importantly, there’s no need to file separate applications for TAN and PAN, as these will be generated as part of the registration process.

Step 5: Issuance of the Registration Certificate
After the Registrar of Companies (ROC) verifies all forms and documents, they will issue the Certificate of Incorporation for the OPC. Once you receive this certificate, your One Person Company is officially registered, and you can begin business operations.

This streamlined process for OPC registration makes it an ideal option for solo entrepreneurs seeking limited liability protection with minimal compliance requirements.