WHO CAN INCORPORATE AN ONE PERSON COMPANY(OPC) IN INDIA?
According to Section 2(62) Of The Companies Act, 2013, One Person Company Which Is Run By One Person. It Is Incorporated As A Private Limited Which Has Only One Member. It Is Form Of Business Entity That Combines The Advantage Of A Sole Proprietorship And Private Limited
WHO CAN ELIGIBLE INCORPORATE ONE PERSON COMPANY(OPC) IN INDIA?
Natural Person: Only a natural person, who is an Indian citizen and resident in India, can incorporate an OPC. This means that both the director and shareholder of the OPC must be an individual person.
Minimum Director and Shareholder: An OPC must have at least one director and one shareholder. The same person can hold both positions.
Nominee Director: The sole member of the OPC must nominate a nominee director in the memorandum of association. This nominee director will take over the management of the OPC in case the original director becomes incapacitated or dies.
Residential Status: The director and nominee director must be Indian residents. A resident in India means a person who has stayed in India for a minimum of 182 days during the immediately preceding one financial year.
DIN (Director Identification Number): The director(s) must obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA).
Digital Signature Certificate (DSC): The director(s) must also obtain a Digital Signature Certificate (DSC) to digitally sign the documents required for incorporation.
Name Availability: You must choose a unique name for your OPC, and it should end with “OPC Private Limited.”
Registered Office: You need to have a registered office address in India for your OPC. It can be a residential or commercial address.
No Other OPC or Conversion: A person cannot incorporate more than one OPC. Also, an existing sole proprietorship cannot be converted into an OPC if the proprietor already has an OPC.
Minimum Capital Requirement: There is no minimum capital requirement for an OPC, which means you can start with any amount of capital you deem appropriate for your business.
DOCUMENTS REQUIRED FOR AN OPC
Director Identification Number (DIN): The promoter of the OPC must obtain a DIN, which serves as a unique identification number for directors. This can usually be obtained by filing an application with the relevant authority.
Digital Signature Certificate (DSC): A digital signature is required for online filing of documents. The promoter must obtain a DSC from authorized agencies.
Name Reservation: An application for name reservation needs to be filed with the appropriate government authority. You will need to provide one or more name choices for your OPC in order of preference.
Memorandum of Association (MOA) and Articles of Association (AOA): These are important documents that outline the objectives and rules of your OPC. They need to be drafted and signed by the sole member/shareholder.
Proof of Identity: You will need to provide a valid proof of identity, such as a PAN (Permanent Account Number) card, passport, or driver’s license, for the sole member/shareholder.
Proof of Address: You will need to provide a valid proof of address, such as a utility bill, bank statement, or rental agreement, for the sole member/shareholder. This document should not be more than two months old in most cases.
Address Proof for Registered Office: You will need to provide proof of the registered office address of the OPC, such as a utility bill or rental agreement.
Consent and Affidavit: The sole member/shareholder must sign a consent form and an affidavit stating their intention to form the OPC and act as its director.
Nominee Information: In some jurisdictions, you may need to provide information about a nominee director who will take over in the event of the sole director’s incapacitation or death.
Board Resolution: A board resolution may be required to authorize the incorporation of the OPC and the appointment of the sole director.
STEPS OF REGISTERING AN OPC (ONE PERSON COMPANY)
- CHECK THE ELEGIBILITY AND DOCUMENTATION: the person have Aadhaar card, Pan card and Bank statement of current period.
- OBTAIN DSC: as per information technology act, 2000 has provision for use DSC for electronic form (digital signature certificate). It is secure key issued by certifying authorizes (CAs).
- OBTAIN DIN: it is unique director identification number allotted by the central government to any person who is intending to be director.
- NUMBER RESRVATION FOR OPC: there is one person required for an OPC shall appoint one person as a nominee to act as member in case death or incapacity of the member at the time of conversion into OPC.
- PREPARATION OF MOA: Memorandum of Association (MOA) an important corporate document in certain jurisdictions. In this there is scope of work, objective, rules, and internal management.
- PREPARATION OF AOA: Article of Association (AOA) contain its rules and regulation that control its business and manage its internal affair.
- FILLING FOR FORM SPICE: It is an abbreviation for simplified proforma for incorporating a company electronically and as the name suggest. It is an application form for registering a company with MCA.
- AUTHORISED CAPITAL: A person or member should have minimum authorized capital of 1lakh Rupee.
FEATURES OF ONE PERSON COMPANY (OPC)
- EASY SUCCESSION: Despite having one member the one person will run the business.
- LIMITED LIABILITY: The member in one-person company has limited liability. Which is great protection to its member. Creditor can sue company not director.
- SOLE- PROPRIETERSHIP OR SHAREHOLDER: In OPC a single member act as director so they stand liable for managing the company. One person is more sufficient and act as shareholder with all responsibilities.
RESTRICTION FOR AN ONE PERSON COMPANY (OPC)
- HIGHER RESTRICTION ON BUSINESS ACTIVITIES: OPC is not permitted to conduct non-banking financial investment activities. Register yourself in OPC will not provide you freedom.
- NO CLEAR DISTINCTION BETWEEN OWNERSHIP AND MANGEMENT: One person has a single person act as both the director and management. The single person is permitted to take and approve all the decision.
ADVANTAGES OF OPC IN INIDA
- LEGAL STANDING: The member grants the OPC registration a separate legal entity status. The member will not personally liable for company’s loss.
- EASY ACCESS TO FUNDING: One member can easily raise money through venture capital, angel, investor, incubators and other sources because it is private company.
- LESS COMFORMITY: As per companies Act, 2013. The OPC is not required to prepare the cash flow statement. The secretary of the company is not required to provide any annual reports and maintain any account books.
- EASY INTEGRATION: One-person company in India can be easily integrated without any legal hassles. A member also serving as a director should provide the approval for integration. There is no minimum paid up capital requirement.
- EASY TO MANAGE: In OPC Making decisions is straightforward, and it happens quickly. There won’t be any internal disputes or delays, managing the company will be easy.
HOW AURIGA ACCOUNTING HELP YOU
Initial Consultation: When you approach Auriga Accounting, they would likely begin with an initial consultation to understand your business goals and requirements. During this discussion, they may assess your eligibility for OPC incorporation and provide information on the process.
Documentation and Information Gathering: Once you decide to proceed, the firm would guide you through the collection of necessary documentation and information. This includes your identity proof, address proof, proposed company name, registered office address, and any specific requirements related to your business.
Name Approval: Auriga Accounting would assist you in choosing a unique name for your OPC and check its availability through the Ministry of Corporate Affairs (MCA). They may also suggest alternatives if your preferred name is unavailable.
Drafting of MOA and AOA: Auriga Accounting would help you draft the Memorandum of Association (MOA) and Articles of Association (AOA) in accordance with legal requirements. These documents define the company’s objectives, rules, and regulations.
Digital Signature Certificate (DSC) and Director Identification Number (DIN): If you haven’t already obtained a DSC or DIN, Auriga Accounting would guide you through the application process for these essential elements of company incorporation.
Filing with ROC: Auriga Accounting would prepare and file the incorporation application with the Registrar of Companies (ROC) using Form SPICe (Simplified Proforma for Incorporating Company Electronically). This includes submitting all required documents and paying the prescribed fees.
Verification and Approval: After submission, the ROC will review your application. Auriga Accounting would liaise with the ROC to address any queries or concerns and ensure a smooth approval process.
Certificate of Incorporation: Once the ROC approves your application, you will receive a Certificate of Incorporation. This document confirms that your OPC is officially registered.
PAN and TAN Application: Auriga Accounting may assist you in applying for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for your OPC, which are necessary for tax compliance.
Compliance Guidance: Auriga Accounting may provide guidance on post-incorporation compliance requirements, such as annual filing of financial statements, annual returns, and maintaining corporate records.