Cracking the One Person Company Registration Code

OPC stands for One Person Company came into effect with the introduction of Companies Act 2013. Before this, no single person was allowed to form a company under the Companies Act 1956. OPC is the most preferred legal structure as it combined the features of Corporate such as separate legal entity and perpetual succession as well as Sole Proprietorships such as single owner and sole control.

OPC now avails benefits of Private Company, Public Company and LLP such as continuous existence, limited liability, separate legal entity, etc., with the additional advantage of sole ownership. Every company, including OPC in India, is required to comply with the provisions of preparing and filing financial statements annually. Steps to form OPC and related topics are discussed in detail henceforth.

OPC can be registered on MCA with ease by following these simple steps:

1. Apply DSC of director and shareholder of the company to Certifying Authority by attaching following documents with the application:

• PAN and Aadhar of applicant
• Passport size photograph
• Contact details of applicants such as Email-id, Mobile number, etc.
• Address of applicant

1. The single owner of OPC can be Director as well as Shareholder. Since if only one person is being appointed as a director and subscriber, only his Digital Signature Certificate and DIN number will be required.
2. Apply name for OPC which shall be unique and not too resemble any other registered name through RUN- a web service available on MCA. Up to two names can be reserved in a single RUN form with one re-submission.
3. Submit three linked forms on MCA: SPICe, SPICe MoA, and SPICe AoA by paying the prescribed government fees. Affix the DSC of director and professional certifying the form.
4. Registrar once completes the verification shall grant COI (Certificate of Incorporation) to the applicant as a supporting document evidencing company registration.

Following documents are attached with the application:

• MOA and AOA of the company consisting of objects for which company is registered and by-laws under which company will operate
• Nominee of one director who will be acting on behalf of the sole director (if he deceased or become insolvent)
• Declaration from such nominee in form INC-3
• PAN and Aadhar of such nominee as well as director and subscriber
• Consent to act as a director in form DIR-2 by proposed director
• Address proof of the registered office of the proposed company

Certain restrictions for the incorporation of OPC shall be duly adhered to. Thus for the better understanding of OPC and its requirement, the following is the checklist of key-requirements to be kept in mind:

• A natural person with the status of Indian Resident can incorporate OPC
• No legal entity such as Company, LLP, Partnership, etc., can create OPC
• OPC shall be registered with a minimum authorized capital of INR 1 Lakh
• The nominee shall be compulsorily appointed at the time of incorporation
• OPC is not allowed to be incorporated to do financial activities.
• In case of the following situation it shall compulsorily be converted to Private Limited:

1. Paid-up capital exceeds INR 50 Lakhs.
2. Turnover exceeds INR 2 Crore

• Member of OPC cannot be a minor
• A single person is not allowed to create more than one OPC. Therefore One Person-One OPC

OPC was introduced recently as a substitute for the legal structure of sole proprietorship. As every legal structure comes with its pros and cons, OPC has certain benefits of sole-ownership and limited liability; it does have certain drawbacks too, such as nominee appointment, unnecessary expenses of compulsory conversion to Private Limited if it exceeds threshold limit, etc. Therefore, it is advisable to understand the benefits and limitations of each legal structure thoroughly before incorporating the one.