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One Person Company

One person company was introduced by Companies Act, 2013 which is a combination of Sole Proprietorship concern and a private limited company. An OPC needs only one member who is the sole owner/director of the company with a paid up share capital of 1,00,000/- and the liability of the company is limited to the company and not the members.

 The MOA of OPC shall indicate the name of the other person, with his prior written consent in the prescribed form, who shall, in the event of the subscriber’s death or his incapacity to contract become the member of the company and the written consent of such person shall also be filed with the Registrar at the time of incorporation of the One Person Company along with its memorandum and articles.

Advantages of One Person Company:

a) Limit the risk to Personal Assets

  • With the limited liability protection, the assets of the business are at risk and not the promoter’s personal assets such as personal bank accounts, cars and houses.

b) Improve Business Credibility

  • The information relating to the company, such as name of the company, date of incorporation, registered office address, status of the company, and other information are made available in a publicly searchable database. This feature makes it easy to authenticate the existence of the business, improving business credibility.

c) Attract Funding

  • Private limited company has a better scope for funds. It can borrow in its own capacity from banking and financial institutions. It can also debentures, secured as well as unsecured and accepts deposits from the public.

d)  Separate Legal entity

  • A Private limited company is a separate legal entity from that of its owners. It can own property in its own name and can also incur debts. The members (shareholders/directors) have no liability to the creditors of the company.

e) Complete Control on the company with a single owner

  • It leads to fast decision making and easy execution of works. However an OPC can appoint as many as 15 directors without giving share to them.

f) Easy Exit Plan

  • An OPC is easy to sell, very less documentation without any hassles. This is the best type of strategy for the promoters.
private limited company

 FAQ on One Person Company:

What are the steps to incorporate OPC?

  •  Obtain Digital Signature Certificate [DSC] for the proposed Director(s).
  • Obtain Director Identification Number [DIN] for the proposed director(s).
  •  Select suitable Company Name, and make an application to the Ministry of Corporate Office for availability of name.
  •  Draft Memorandum of Association and Articles of Association [MOA & AOA].
  •  Sign and file various documents including MOA & AOA with the Registrar of Companies electronically.
  •  Payment of Requisite fee to Ministry of Corporate Affairs and also Stamp Duty.
  •  Scrutiny of documents at Registrar of Companies [ROC].
  • Receipt of Certificate of Registration/Incorporation from ROC.

What are the terms and restrictions of OPC?

  •  A person shall not be eligible to incorporate more than a One Person Company or become nominee in more than one such company.
  •  Minor cannot become member or nominee of the One Person Company or can hold share with beneficial interest.
  • An OPC cannot be incorporated or converted into a company under Section 8 of the Act. [Company not for Profit].
  • An OPC cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.
  •  An OPC cannot convert voluntarily into any kind of company unless two years have expired from the date of incorporation of One Person Company, except the Paid-up capital of the Company crosses 50 Lakhs or the average annual turnover during the relevant period exceeds 2 Crores, then the OPC has to invariably file forms with the ROC for conversion in to a Private or Public Company, with in a period of 6 Months on breaching the above threshold limits.

What are the documents required to start a private limited company?

  • Photograph
  • PAN Card
  • ID-proof (Voter ID/Aadhar Card/Driving License/Passport)-Any 1 of Director.
  • Address Proof (Electricity Bill/Telephone Bill/Bank Statement)-Any 1
  • For Residential Address:
  1. Rent agreement along with latest rent receipt (in case premises are rented)
  2. House Tax Receipts (in case premises is owned)
  3. Electricity Bill
  4. NOC from the owner (for format)

Is an office space required to open a company?

  • No, the company can be opened with the residential address also.

What is Digital Signature Certificate?

  • Digital Signature Certificate (DSC) is an electronic signature, which is in the form of codes. It is used for signing electronic forms, filed with ROC. It cannot be used in physical forms.

What is Director Identification Number (DIN)?

  • It is a unique identification no. required to be mentioned in all documents by the director of the company. A director after obtaining DIN shall have to inform the company.

What is MOA and AOA of company?

  1. MOA mean Memorandum of Association and AOA is Articles of Association. These are the bylaws or rules which defines the objects, scope and legal liabilities of the company. Any company registered with Taxoservice, we will be providing a hard copy of MOA and AOA along with a soft copy.

Can the registered address of the company be changed?

  • Yes, the registered address can be changed anytime after incorporation.

Does the capital amount have to be deposited in a bank account?

  • Yes, a bank account need to be opened after the company is incorporated and the capital need to be deposited within 2 months of incorporation.

How long is the company valid for?

  • Once a Company is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and maybe struck off from the register after a period of time. A struck-off Company can be revived for a period of up to 20 years.

What are the basic requirements for naming a company?

  • First ensure that company name is not similar to any other Private Limited, OPC, LLP or Public limited company. Also, do check if your first is not a registered trademark taken by anybody under the IP Act. Also, make sure the name is not too generic; try not to use abbreviations, adjectives. While choosing the name make sure that name should contain the objective of the business like if the objective is consultancy or technology then word is Technology, Technosoft, IT consultancy.

What is the form required to be filed for conversion of OPC into Private Limited Company?

  • Form INC-6 need to be filed.

Time limit of filing form INC-6?

  • Voluntary Conversion: Within 30 days
  • Mandatory Conversion: Within 6 months

What if a member of an OPC becomes a member in another OPC by virtue of being 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.

Which Form is to be filed in case of withdrawal of consent by the nominee of an OPC or in case of intimation of change in nominee by the member?

  • 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.

one person company

One Person Company

(*Excluding government fees)

New forms of business to enable entrepreneurs carry on business in corporate framework

2,039.00

  • PAN

    • 110

    TAN

    • 150

    1 copy of MOA & AOA

    • 200

    Company’s Stamp

    • 250

    Common Seal

    • 450

    DSC/director

    • 850
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