Ask 4 Compliance | One Person Company
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ONE PERSON COMPANY (OPC)

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ONE PERSON COMPANY REGISTRATION

The concept of One Person Company in India was introduced through the Companies Act, 2013 to support entrepreneurs who on their own are capable of starting a venture by allowing them to create a single person economic entity. One of the biggest advantages of a One Person Company (OPC) is that there can be only one member in a OPC, while a minimum of two members are required for incorporating and maintaining a Private Limited Company or a Limited Liability Partnership (LLP). Similar to a Company, a One Person Company is a separate legal entity from its promoter, offering limited liability protection to its sole shareholder, while having continuity of business and being easy to incorporate.

Though a One Person Company allows alone Entrepreneur to operate a corporate entity with limited liability protection, an OPC does have a few limitations. For instance, every One Person Company (OPC) must nominate a nominee Director in the MOA and AOA of the company – who will become the owner of the OPC in case the sole Director is disabled.

Our team of highly qualified professionals at Ask4compliance.com can help you to establish a more organised One Person Company to start your business as an individual corporate entity.

Process & Timeline

8-12 days

Professional Fees

Rs. 6000

(GST, Government Fees and other Out of Pocket Expenses Extra)

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Minimum Requirements, Terms and Restrictions to Establish an OPC

  • It shall have only 1 Shareholder.
  • Minimum 1 Director mandatory.
  • The director and the shareholder can be the same person.
  • The shareholder shall nominate someone else as nominee.
  • There is no minimum capital requirement to establish One Person Company.
  • OPC has to be suffixed with the name of the OPC to identify it as One Person Company.
  • Only an Indian resident or an Indian citizen is eligible to incorporate OPC and can become a nominee of the OPC.
  • An OPC cannot be converted or incorporates under Sec-8 of the Act.
  • An OPC cannot carry out Non-Banking Financial Activities.
  • An OPC cannot convert into any kind of company until its 2 years have expired from the date of its incorporation of OPC except when it exceeds the threshold limit of Rs. 50Lacs/2 Crores.
  • In case the paid up share capital of an OPC exceeds Rs. 50 Lacs or its average annual turnover of immediately preceding three consecutive financial years exceeds Rs. 2 Crores, then the OPC has to mandatorily convert itself into private or public company within 6 month of such event.

ADVANTAGES OF ONE PERSON COMPANY

  • Single Promoter: One Person Company is the only type of corporate entity that can be started and operated by a single promoter with limited liability protection in India. A corporate form of legal entity in One Person Company ensures that the business has perpertual existence and easy ownership transferability.
  • Uninterrupted Existence: A company has ‘perpetual succession’, meaning uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership.
  • Easy Transferability: Ownership of a business can be easily transferred in a company by transferring shares. The signing, filing and transfer of share transfer form and share certificates is sufficient to transfer ownership of a company. In a one person company, the ownership can be transferred by altering the shareholding, directorship and nominee director information.
  • Borrowing Capacity: Banks and Financial Institutions prefer to provide funding to a company rather than partnership firms or proprietary concerns. However, a one person company cannot issue different types of equity security, as it can only be owned by one person at all times.
  • Owning Property: A company being an artificial person, can acquire, own, enjoy and alienate, property in its name. The property owned by a company could be machinery, building, intangible assets, land, residential property, factory, etc.,  Further, the nominee director cannot claim any ownership of the company while serving as a nominee director.
  • No Criteria of Minimum Paid Up Capital: No minimum capital is required to start an “One Person Company”.

DOCUMENTS REQUIRED FOR REGISTRATION OF PROPRIETORSHIP

  • Passport size photographs of Director and Nominee Director: Two passport size photographs of Director and Nominee Director (JPEG format).
  • Proof of Identity of Director and Nominee Director: Self attested copy of Pan Card/Voters Identity Card/Aadhaar Card/Passport/Driving license.
  • Proof of residence of Individual: Self attested copy of Voters Identity Card/Aadhaar Card/Passport/Driving license/Bank Statement/Electricity Bill/Mobile Bill/Telephone Bill.
  • E-Mail id and Mobile number: For the Director, Nominee Director and the OPC’s
  • Registered Office Address Proof
    • If Rented: Rent Agreement and utility bill likely electricity bill, telephone bill, etc. and No Objection Certificate from owner.
    • If Owned: Ownership proof, Receipt of Municipality tax paid etc. and No Objection Certificate from owner.

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