ONE PERSON COMPANY

One person company is form of private limited company in which there is only one member (shareholder). Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. In One person company liability of the owner is limited to the extent of its shareholding and further there is restriction on transfer of shares to publicly.

Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. The term "resident in India" means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.



Inclusion

DSC of Director

DIN of Director

Incorporation with Registrar of Companies

Customized Memorandum of Association and Article of association.

VAT/SERVICE TAX/EXCISE/IEC or any other registration applicable and selected by the user.

Courier charges of sending the original certificate and 1 original MOA & AOA at your address.

Any Government Fee or charges payable.

Application of PAN and or TAN

EXCLUSIONS

Inspection fee payable at the time of visit to the officer if any.

Fresh application fee if registration applicable is rejected due any discrepancies in documents of the applicant.

Post Incorporation filings of documents

Any registration with government department not selected by the user.

REQUIRED DOCUMENTS

Identity and Address Proof of the Applicant subscribers

Copy of PAN card of subscriber (for DIN and registration with govt. department)

Passport size Photographs of subscriber, if applicable

Address Proof and NOC for proposed address of Company.

Any other documents according to selected registration.

TIMELINE

2 days process for gathering the necessary details and documents

1 day process of DSC application of directors

1 day process for application of DIN

2 days process for preparing documents, MOA & AOA for submission of forms (if customized time depends upon time take by client)

7 days process for approval from the date of submission and providing certificate of incorporation.

7 days process of PAN application

1 day process for getting documents ready for submission to govt. after receipt of PAN.

2 day process for submitting application to government after signing and verification of all documents.

1 day process for providing certificate after approval from relevant department and updating its status.




FREQUENTY ASKED QUESTIONS


1. What is One Person company (OPC)?

One person company is form of private limited company in which there is only one member (shareholder). Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. In One person company liability of the owner is limited to the extent of its shareholding and further there is restriction on transfer of shares to publicly.

2. Who is eligible to act as a member of an OPC?

Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. The term "resident in India" means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year

3. Whether registration of One Person company is mandatory?

Yes for formation of One person company registration with registrar to companies is mandatory. To know the process click here
Name reservation: Form INC-1 shall be filed for name availability.
Incorporate OPC: After name approval, form INC-2 shall be filed for incorporation of the OPC within 60 days of filing form INC-1.
Form DIR-12 shall be filed along with (linked) form INC-2 except when promoter is the sole director of the OPC.
The company shall file form INC-22 within 30 days once form INC-2 is registered in case the address of correspondence and registered office address are not same.

4. What are the agreement or deed governing the bye laws of the One person company?

In case of companies including one person company the area of operation i.e. business activities, its relation with outsiders, restriction on transfer of shares, directorship and internal mode of operation of company are governed and is written in documents which is called Memorandum of association and Article of association. The Memorandum and Article of association are the basic documents of the company which are mandatory and just like constitution of the company. To know more about Memorandum and association and article of association click here.

5. What is minimum amount of paid up capital required to start One person company?

Minimum paid up capital of Rs100000/- (One Lac rupees) is required to be introduced in order to incorporation/form One person company. In the One person company paid capital of the company is restricted to the extent of authorized capital of the company and in order to enhance the paid up capital, one has to increase the authorized capital of the company. click here.

6. Is there any restriction on maximum amount of capital in One Person company?

In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover of immediately preceding three consecutive financial years exceeds two crore rupees, then the OPC has to mandatorily convert itself into private or public company.

7. How to intimate RoC that the OPC has exceeded the threshold limits and require conversion into private or public company?

The OPC shall inform RoC in form INC-5, if the threshold limits is exceeded and is required to be converted into private or public company.

8. Is there any form that is to be filed for conversion of an OPC into private or public company? Is there any other purpose for filing this form?

Form INC-6 shall be filed by an OPC for conversion of an OPC into private or public company. Yes, the private company will also file form INC-6 for converting itself into an OPC. The paid up share capital of private company should not be exceeding fifty lakh rupees and should not have average annual turnover more than two crore rupees at the time of such conversion into OPC. The company shall be having one member and shall appoint one nominee to act as member in case of death or incapacity of the member at the time of conversion into OPC.

9. A person can be a member in how many OPCs?

A person can be member in only one OPC.

10. What if a member of an OPC becomes a member in another OPC by virtue of being a nominee in that other OPC?

Where a natural person, being member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days. Form INC-4 shall be filed in case of withdrawal of consent by the nominee or in case of intimation of change in nominee by the member.

11. Can i open a bank account of One Person company?

Yes, with the certificate of incorporation and Memorandum of association bank account after complying with other RBI Norms can be opened, there is no need to apply any other registration with government department like VAT or Service Tax etc.. To know more about how to open bank account click here.

12. Whether registration with government departments are mandatory ?

No, only applicable government registrations are mandatory like if sales exceed specified limit of turnover then registration with Value Added Tax (VAT), Service Tax Registration, Excise or shop and establishment as applicable are mandatory. To know about registration with government departments click here.

13. What are the advantages of Start business as One Person Company?

Advantage
CORPORATION FORM

You can add LTD. to your business name. In business, having company form has indirect advantage. People like to deal with company and you can achieve their confidence in your business. Other benefit is getting employees easily. People prefer to work with company rather than firm.

Advantage
LIMITED LIABILITY

As sole proprietor, you have unlimited liability for your business result. If you are doing loss, your personal assets can be claimed by your creditors. So there may be some mental worry. But in one Person Company, you can form One Person Company limited by shares, limited by guarantee or unlimited company. You can choose here limited by share form and your liability is limited to business assets. Any business loss cannot touch your personal saving.

Advantage
RELAXATION FOR SOME SECTIONS OF COMPANIES ACT

To reduce burden of compliance of laws of companies act, there is relaxation available to OPC former. He is not required to follow section 96, 98, 100 to 111. He is also not required to hold annual or extra ordinary general meeting. Additionally, he is not required to preparing cash flow statement. He can also sign annual return himself as a director and no need to get signed it by company secretary. Read more about Companies Act 2013.

Advantage
FULL MANAGEMENT CONTROL ON OPC

He can achieve full management control over company. He is not required to give share of management to anybody. He can appoint directors but cannot give control to them. This will bring fast decision making process. This fast action process brings fast profitable results if decisions are taken wisely and proper care.

Advantage
CONVERSION OF ONE PERSON COMPANY TO PRIVATE LIMITED COMPANY

One Person Company shall be converted to private limited company when OPC reached paid up capital at 50 lakhs rupees or when average turnover of company (3 years) reaches 2 crores or more. So it is easy to form OPC once and after that coverts it to private limited company. Until your turnover increases significantly, you can enjoy benefits of OPC.

Advantage
MINIMUM ONE DIRECTOR

While forming one person company, you may act as director and shareholder. Only one director is valid for OPC. However, you can appoint others as director and maximum number of directors can be 15.

14. What are the disadvantages of Start business as One Person company?

Advantage
HIGH TAX RATE

As a corporate form, you cannot avail tax slab advantage. In proprietary, you are required to pay as per your income at 10%, 20% or 30% tax rate. But in OPC, you are directly charge 30% income tax. High tax rate is big disadvantage of OPC. Read about different corporate taxes by following this link.

Advantage
COMPLIANCE COST

Compliance cost of proprietary or partnership firm is very low compare to one person company.

Advantage
OPC IS ADDED IN NAME

You are required to mention OPC in your company name in bracket. There is slight lower impression that the company is ran by only one person. Other side, if you start company with few shareholders, the management cannot be devoted and you can give impressions to client also.

Advantage
ONE PERSON MANAGEMENT

Shareholder is one and all the decisions are done by him. If he is wise, it is good but sometimes cross check is required for business growth. Company’s success and growth is all dependent on one person’s decision taking ability.

Advantage
HIGH FORMATION COST

There is no requirement to any formation charges for proprietary concern except registration for various laws like service tax, PF , VAT when required. But in OPC, there is high formation charge. You are also required to start the company with one lakh rupees.

Advantage
OPC INCORPORATION IS ALLOWED

You can incorporate only one OPC (One Person Company). If you want to start other company as OPC, it is not allowed. In today’s fast economy, more than one business can diversify income and save you from huge losses. Only one stream of income or business is risky nowadays. Having this condition is obstacle for serial entrepreneurs

Advantage
NOT SUITABLE FOR HIGH TURNOVER

There is provision of automatic conversion of OPC in PVT ltd. if you estimate high turnover of your business or you have already high turnover, better option is establish PVT ltd than One Person Company. Establishing OPC and after sometimes conversion of OPC to Pvt. ltd company is not good idea

15. Can a One person company invite investor’s money?

No, cannot invite investors money in form of equity capital rather it has to be funded as secured or unsecured loans. All banks and financial institutions give more preference to advance loans and funding to private limited companies rather than One person company.

16. Whether name of the company is protected against duplication? Or whether name of an existing One person company be used for form new company?

No unlike partnership firm, in case of limited liability partnership and companies including one person company name of an existing company cannot be taken by any other person. If anyone tries to take same name it will not be approved by the registrar of companies. So it provide protection of theft of name irrespective of whether trademark of name is taken or not. Further taking name of the company requires approval from the registrar of companies and should company with the guidelines issued from time to time. To know more about such guidelines click here.

17. Which forms are required to be filed with registrar of companies by One person companies?

To know the forms which are required to filed with registrar of companies, click here.

18. What are the due dates of filing of forms of One person company and penalties for late filing of forms of one person company?

To know the due date of filing forms with registrar of companies, click here.

19. How can i compare one person company with other form starting business?

Basis Sole Proprietorship Partnership Limited Liability Partnership Pvt. Ltd Co OPC Public Limited Company
Annual income tax return filing Filing of return is compulsory only if the Gross Total income exceeds the Exemption limit. Compulsory irrespective of profit or loss earned by entity during the year. Compulsory irrespective of profit or loss earned by entity during the year. Compulsory irrespective of profit or loss earned by entity during the year. Compulsory irrespective of profit or loss earned by entity during the year. Compulsory
Statutory Audit Not Applicable Not Applicable Not Applicable Compulsory Compulsory Compulsory
Liability Unlimited liability Unlimited liability As the name itself suggests, there is limited liability in case of limited liability partnership. Limited by Guarantee or Shares Limited by Guarantee or Shares Limited by shares
Ownership and Control One person has total control and ownership of the enterprise. Ownership and Control is through mutual agreement. Ownership and control is through mutual agreement. Ownership and control is amongst the shareholders of the co. Ownership and control is in the hands of only one member. Ownership is amongst the shareholders and control among the directors chosen by shareholders
  One Minimum 2 Minimum 2 Minimum 2 One Minimum 7
Complications Sole proprietorship is the least complicated form of business. Partnership is also less complicated as compared to company but more complicated as compared to sole proprietorship. Partnership is also less complicated as compared to company but more complicated as compared to sole proprietorship. Most complicated as compared to sole proprietorship and partnership firms. Most complicated as compared to sole proprietorship and partnership firms. Most complicated as compared to private limited company
Risk Risk is very high. Risk is high. Risk is low as liability is limited. Risk is low as shareholder’s liability is restricted to unpaid calls only or any specified amount of guarantee in case of co. limited by guarantee. Risk is low as liability is limited. Risk is low as liability is restricted to shareholding amount and unpaid calls only.
Transferability Cannot Transfer, only in case of death of proprietor New partners can be admitted and old partners can resign New partners can be admitted and old partners can resign Shares can be transferred with restrictions to public There is restriction of transfer of shares subject to change in nominee and directors Shares can be easily transferred without restriction.