One Person Company (OPC) Registration
10,000/- (inclusive of all taxes & fees)
Important Points
- - One Person Company in 10 to 15 days.
- - Completely online service - No physical presence required.
- - No minimum capital requirement.
One Person Company (OPC)
Know What is One Person Company? and How it is registered?
What is a One Person Company (OPC)?
A One Person Company (OPC) is the latest form of business launched in the year 2013. OPC is for single owner/founder who do not find any organized and safe form of business, OPC can be formed by a single member with least compliances and maintenance.
How to register One Person Company (OPC) in India?
One Person Company (OPC) require only one person and one nominee to start a registration process. Nominee is the person who shall take control of the company in case of death of sole member.
# Prepare DSC and file Name Approval: The first step is to prepare DSC and DIN. This takes sometime one to two days. Thereafter, you need to file for name approval. The first word of the name should be unique and name should end with the words “(OPC) Private Limited.”
# File for Incorporation:After taking name approval, the next step is to file for incorporation via spice form INC 32. Further, PAN and TAN are not required to be filed separately and the same is allotted on company formation.
# Take GST Registration:After incorporation, access your business and take necessary registration including GST registration. This is because working without tax license is illegal in India.
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Documents Required for Online OPC Registration
For Single Director & Nominee
- Copy of PAN Card
- Aadhar Card
- Address Proof (Bank Statement, Mobile bill, Telephone bill)
- Passport Size Photo
For Registered Office
- Ownership Proof (Electricity Bill etc)
- Utility Bill (Gas Bill, Electricity Bill)
- NOC (Download format)
OPC Company Registration Process
One Person (OPC) Company registration process is very simple with hubco.in. The whole procedure is completely online and one need not visit our office physically to get the Company registration.
# Step 1 - Arrange all required documents: The first step is to arrange all the documents and send the same over the email to us. We will check it and if everything is fine, you will required to pay 50% advance.
# Step 2 - DSC, DIN and Name Approval: After receiving the required documents and 50% advance, we shall start your work. We will get the DIN, DSC and the name approval.
# Step 3 - File for incorporation: Once your name is approved, you will be required to pay the rest of the amount and then we will be file your companies incorporation. Once approval is granted, the incorporation work stands complete.
Time & Cost for OPC Registration in India
The Total Cost Breakup
| Items | Qty | Price |
|---|---|---|
| Digital Signature Certificate (DSC) | 1 | 500 |
| Director Identification Number (DIN) | 1 | 500 |
| Name Approval | 1 | 1,000 |
| MOA, AOA and Incorporation Fee | - | Nil |
| Stamp Duty of the Respective State* | - | 1,500 |
| PAN and Tan Application | - | 200 |
| INC 22 | - | 300 |
| CA Certification | - | 700 |
| Professional Fee (Inclusive of Taxes) | - | 2,797 |
| Goods and Service Tax (GST) | - | 503 |
| Total OPC Registration Cost in India | 8,000 | |
Time for OPC Company Registration
It takes around 7 to 10 days to complete the company registration process subject to MCA approvals.
How to choose Company Name for OPC Company Registration
Company name is the most important part of registration & hence should be selected with utmost care. Here is the name format:
XYZ (Prefix)
+
Technologies (Suffix)
+
(OPC) Private Limited (End)
- # XYZ - Prefix: The prefix should reflect your brand name and should be unique. I.e. no it should not match with any existing company or trademark. The example of prefix i.e. your first word is TATA, Reliance, Hubco etc.
- # Technologies - Suffix: It is regarded as the second word of your company name. This should reflect your main proposed business. E.g., if you are into technology company, then write technology, for steel business, you can use TATA Steel Ltd.
- # (OPC) Private Limited - End: These are the ending words which are mandated by law. Every OPC company shall end his name with (OPC) Private Limited. The words indicate that OPC means One Person Company Private meaning no public is involved and limited means capital is limited.
Further some other conditions of rule 8 of Companies (Incorporation) Rule, 2014 needs to comply with.
Mandatory Requirements for OPC Company Registration
One person Company (OPC) is a perfect substitute for sole proprietorship business introduced in the year of 2013. OPC allows single person to form a company and start the business in India. However, under OPC, one cannot raise funding nor can issue ESOPs to hire top talents. Further, maximum turnover under this company cannot exceed Rs.2 Cr upon which the OPC is mandatory converted into Private Limited Company. The mandatory requirements are:
- One person and one nominee is required. Nominee is the person who takes control on death of sole founder.
- Whatever is the capital amount of your company, you should invest the same within 2 months of incorporation.
- Any person can form only one OPC as per Companies Act, further only individual can form a OPC.
Who can start a OPC Company in India?
This is one of the most important question that is asked by every person who is willing to start a OPC in India.Through there is no restriction on anybody to form a company in India, but still, we would like to discuss some special cases:
- Existing directors: Yes, they can open the OPC but if they already own one, then any further OPC is not allowed.
- Employees: Employees are generally not allowed by their employers to form a company and be a director. They may hold shares but cannot take position as director. If you want to open a company, then check your employment agreement and you may also seek permission from the respective employer.
- Companies, Firms: As per Companies, act, 2013 only individual can form a OPC.
Funding & Conversion of OPC into Private Limited Company
OPC cannot raise funding by selling the share of equity shares because there cannot be two members. The OPC can be sold completely without dividing any part of equity shares. Further, OPC can also be converted into Private limited Company in consonance with the following rules:
- - Voluntary Conversion of OPC into Private Company: The voluntary conversion of OPC into private limited company can happen only after two years from the date of incorporation.
- - Mandatory Conversion of OPC into Private Company: If the Company has a paid up capital of Rs.50 lakh or more or relevant turnover during the financial year exceed Rs.2 crore, then OPC need to convert into Private limited company.
Mandatory Compliances after OPC Company Registration
There are many compliances which a company needs to follow, however, we would like to discuss few most important compliances for private limited company in India:
ITR
OPC is treated as separate company and hence, all taxes and reports are to be filed.
Accounts
After the close of first financial statement and file the same to ROC.
GST
Once GST is in place, one need to take GST registration and comply with the same as per time frame.
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What all you can do under OPC Company Registration?
A OPC Company Can
Do any type of business except which is specifically restricted by law.
Declare and pay dividend (profits) to their owners/shareholders subject to CDT @ 18.5%.
Accept loan from from its directors.
Can take bank loan from any type of bank.
A OPC Company Cannot
Raise funding from angel investor, Venture capitalist and cannot sell part of shares to any one.
Cannot give any loan to its director or his relative. Further company should not be used to divert funds.
Cannot be converted into Private company before 2 years.
Cannot function beyond what is mentioned in the MOA and AOA of company.
Advantages & Disadvantages of OPC Company Registration
Advantages of OPC Co. Registration
No minimum capital
Secure personal assets
Best way to start for single founders
Easy conversion into Private Company
Disadvantages of OPC Co. Registration
Cannot accept deposits
Max turnover limit is Rs.2 crore
Yearly compliance cost
Cannot raise funding, not for startups
FAQs about One Person Company (OPC)
Q. Can I convert my existing business into One Person Company (OPC) in India?
Yes, you can convert your existing business into One person Company (OPC). But since it is complex procedure, we need to talk to you directly. Please drop your query in the contact form so that we can call you and explain you the things.
Q. What is the difference between LLP and One Person Company?
The LLP and One person Company is totally a different story altogether. A Limited Liability Partnership is a modern way of doing the partnership business in India. Likewise, One Person Company is also a modern way of doing the sole proprietorship business in India. Let us see the difference:
|
Limited Liability Partnerships (LLP) |
One Person Company (OPC) |
|
It is a modern partnership with limited liability. |
It is a modern proprietorship with limited liability. |
|
At least, two persons are required to register LLP in India |
Only one person is required to register in India. |
|
The audit is mandatory after 40 lakh of turnover or 25 lakh of contribution (capital). |
Audit is mandatory even in the case of zero turnover irrespective of the capital amount. |
|
The compliance cost is low as compared to One Person Company (OPC) |
Compliance is more than LLP |
Q. What is yearly compliance cost for maintaining the One Person Company (OPC)?
The yearly compliance cost for maintaining the One Person Company (OPC) is somewhere around 8000 to 15000 which actually depends upon your turnover of the Company. Further, in case you have zero turnover company, then also compliance cost will there because compliance is mandatory in any case.
Q. What are the guidelines for mandatory or voluntary conversion of One Person Company (OPC) into a Private Limited Company?
Conversion of One Person Company into private limited company can happen only in two cases, Voluntary and Mandatory. Mandatory conversion happens only when the capital is raised to 50 lakh or turnover is more than 2 crore.
The voluntary Conversion happen only after two years from the date of incorporation.
Q. Is One person Company (OPC) is eligible for startup benefit? Can it be registered to raise funding?
One person Company (OPC) is a private limited company and hence eligible for startup benefits as laid down by the government under the startup India scheme. However, the biggest problem in this form of business is that it cannot raise funding from a venture capital or angel investor by selling its stake/shares.
A one person Company cannot sell its stake because there can only one shareholder in the company.
Q. How to convert One Person Company (OPC) into Private Limited Company?
Conversion of One Person Company into a Private Limited Company is done either voluntary or mandatory. It is done by filing two e forms to the ROC, i.e. INC 5 and INC 6. The details regarding conversion of One Person Company (OPC) into Private Limited Company is given in next question.
Q. How to Select Name for One Person Company (OPC)? Is their anyone person Company (OPC) name format?
The company name selection should be done on the basis of company name structure. The Company name should start with your brand name e.g Hubco is our brand name (Trademark filed). Likewise, in case of TATA steel limited, TATA is the brand name.
The second part of the Company name denotes its objective. Like in case of TATA Steel Limited, steel denotes its steel business. The last part of the Company name ends up with (OPC) Private Limited. No company can be registered without having (OPC) Private Limited or limited at the end.
The basic structure for your reference is as follows:
| First Name | Objective | (OPC)Private Limited |
|
This could be anything, like your surname, your brand name, like TATA in case of TATA Steel Limited |
Objective denotes your business activity, like steel in case of TATA Steel Limited. |
A One Person Company (OPC) always end with these words and are mandatory by law. |
Important Point: The new company name should not match the existing company or any existing trademark in India. Search for existing trademark or existing Companies in India
Q. What is the minimum capital requirement for One Person Company (OPC) registration in India?
There is no minimum capital requirement to register a One Person Company (OPC) in India. You can register the One Person Company (OPC) as per your choice of capital.
Q. Why startup should not choose One Person Company (OPC) as their form of business?
Startup is the innovative category of a businessman who wants to grow very fast within a short span of time like the previous startups did like Flipkart, Ola, PayTM, etc. They could only become so big because they were able to raise the capital in a timely manner.
One Person Company lacks this skill as there cannot be more than one shareholder in the company and hence it cannot raise funding by selling the stake to the investors.
Q. What are the documents required for bank account opening of One Person Company (OPC) in India?
The list of documents for one person Company is simple and can be opened easily. The requirements are as follows
- Certificate of Incorporation
- PAN Card Acknowledgement
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Board Resolution as per the format given by Bank
- Form INC 3 for Nominee.
Q. How does taxation work over One Person Company (OPC) in India?
Taxation under One Person Company is very similar to the Private Limited Company under which tax is imposed on profits earned by the company @ 29%. Further, the tax rates are further reduced to 25% for Small and Medium Enterprises.
This is different from the proprietorship under which slab rate is applicable. Further, proprietors can avail the benefit of presumptive taxation but One Person Company cannot.
Q. How to convert sole proprietorship into One Person Company (OPC) in India?
If you are running a sole proprietorship firm and wants to convert it into One Person Company, then we need to convert it according to the Income Tax Act, 1961 so that you can save your tax on the conversion process.
As per income tax act, conversion of sole proprietorship into Private Limited Company is exempt from tax, however, subject to the prescribed conditions.
Q. What do you mean by sole proprietorship Companies as per Companies Act, 2013?
Sole proprietorship companies under companies act, 2013 is another name for One Person Company (OPC) which is also commonly known as Single Person Company. If you wants to register sole proprietorship company in India, then you need to register a One Person Company (OPC) in India.
Q. What is a difference between sole Proprietorship and One Person Company (OPC)?
In a move to increase corporate business in India, the government introduced the concept of One Person Company (OPC) in the year 2013. Since then it is taken as a substitute for sole proprietorship entity in India. Further, there is no denying fact that OPC company is far more superior and better than the traditional sole Proprietorship business.
|
Sole Proprietorship |
One Person Company |
|
Personal Assets are not safe under proprietorship, its biggest disadvantage. |
Its limits your liability and hence personal assets are safe. |
|
There is no legal registration of proprietorship; it is registered based on the local license like VAT, Service Tax, etc. |
It is one of the recognised and organised form of business. |
|
It is not recognised and lacks trust factor |
Since; it is registered form of business, |
|
There is no compliance cost under proprietorship in India. |
The yearly compliance cost will be there as it needs to get audit, filings, etc. |
Q. What is a difference between a Private Limited Company and One Person Company (OPC)?
A private Limited Company is the sole choice for startups or two persons who are planning to start the company in India. On the other hand, a One Person Company (OPC) is the substitution for sole proprietorship business in India. Let’s see the difference:
|
One Person Company (OPC) |
Private Limited Company |
|
A Single person can register a One Person Company (OPC) |
Atleast two persons are required to register a private Limited Company. |
|
A OPC cannot raise funding by selling its stake and hence not eligible for startups. |
It is a perfect form of business for startups in India. Private Limited Company is the most chosen form of business. |
|
OPC can have only one shareholder but can have more than one director. |
Minimum of two shareholders and two directors are needed to start the private company. |
|
It can be converted into private limited company only after two years. |
It can be converted into Public company but not into a One Person Company (OPC). |
Q. How to start a One Person Company business in India?
Starting a One person Company business in India is a very simple job. To start this company, you need to have two person, one will be the sole owner and another is the nominee who shall take care of the company in case of death of the sole owner/director. Further, apart from this, you need to have basic documents like PAN and ID proof to proceed with the registration.
Once registration of OPC is done, you can start the business immediately.
Q. What are the major disadvantages (cons) for One Person Company (OPC) registration?
There are few demerits/disadvantages associated with One Person Company (OPC) registration. Few of the disadvantages of One Person Company (OPC) registration are as follows:
- A One Person Company (OPC) cannot raise funding by selling its shares and hence not preferred for startups.
- It increases the compliance cost yearly because audit and other compliance are mandatory irrespective of turnover.
- It cannot be converted into private company voluntary before two years from the date of incorporation.
Q. What are major advantages (pros) of One Person Company (OPC)?
One Person Company (OPC) registration is the first step to start your business in India. It provides you basic identity and basic documentation based upon that you can do multiple activities like opening bank account, taking space on lease etc. Here are some major advantages of One Person Company (OPC) Registration:
- It helps you to protect your personal assets and keeps your liability limited.
- It provides separate legal entity status and which makes easier for you to have loan funding.
- One Person Company is registered form of business better than sole proprietorship.
Q. What is a total time taken to register One Person Company (OPC) in India?
The total time taken to register the One Person Company (OPC) in India is around 10 to 15 days. However, make sure you fulfils all the requirement for faster processing of application.
Q. Can a foreign individual/NRI’s start One Person Company in India?
No foreign individual/Non-resident Indian (NRI) can start the One Person Company (OPC) in India. As per law, the only resident Individual person can start the One Person Company (OPC) in India.
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