One Person Companies (OPCs) are companies formed by a single person. OPC Formation Procedure In India this type can be formed with just 1 director and 1 member, per Section 2(62) of the Company’s Act of 2013.
According to Section 2(62), OPC grants a single promoter full control over a business while limiting his/her liability to capital contributions. In addition to being the company’s sole shareholder, this individual may also serve as its director. A nominee director may also serve, but he/she has no power until the original director becomes unable to sign contracts.
OPC provides a mechanism for a sole entrepreneur to form a limited liability company and manage it. The purpose of the organization is to assist sole members who own businesses.
The Eligibility Criteria for Forming an OPC
Contents
A company shall be incorporated according to Rule 3 of the latest Company (Incorporation) Rules, 2014
- Only natural persons with Indian citizenship, regardless of whether they reside in India or elsewhere-
Whether in India or abroad.
Must be the sole member of a company consisting of one person.
‘Resident in India’ means someone who has spent at least 120 days in the country within the preceding calendar year.
- Natural persons must not have more than one member company at any time, nor can they act as nominees for more than one member company
- A minor may not hold shares with a beneficial interest of the OPC or become a member or nominee of the OPC.e of the OPC.
Further, such a company may not engage in non-banking financial investment activities, including investing in securities of any other corporation.
What Are the Benefits of an OPC?
Unlike its sole member, an OPC is a separate legal entity. The sole member is only liable for the contribution he or she made to the business. It is the only form of limited liability company in India that does not require more than one member. The OPC structure allows each member to make all decisions quickly and without any unnecessary delays due to a group’s deliberations.
There are many benefits to the OPC structure, such as:
- Management and existence autonomy
- Flexibility with regard to corporate taxes
- Legal existence separate from the company
- Liability limit
- Recognizing the business’s status and legitimacy
- Facilitating funding
Restrictions on Incorporating an OPC
There may be only one OPC per director. As well, a person cannot enlist in another OPC if they are already a member of one. Additionally, under Section 8, an OPC cannot be converted into a company.
Finance Minister Nirmala Sitharaman during her presentation of the Union Budget 2021-22 announced that there are no restrictions on companies with an average annual turnover of one person and their paid-up capital.
PAN Card of owner documents Required for OPC Registration
- Passport size photograph of the owner
- Copy of Aadhaar card/voter identity card
- Copy of property papers (if owned)
- NOC from the landlord
- Copy of rent agreement and NOC from the landlord (if rented)
- The Memorandum of Association (MoA)
- The Articles of the Association (AoA)
- Nominee’s consent in Form INC-3 along with their PAN card and Aadhaar card
- Electricity/ water bill
Procedure for Forming a One Person Company
Obtaining a Digital Signature Certificate (DSC)
In today’s online world, a DSC is essential for incorporation. Additionally, a Class-II Digital Signature Certificate (DSC) is required for the director to be able to do so. It may take three to five days for the entire process to be completed.
Fill out the DIN application
The DSC must then be submitted on the SPICe+ form along with the director’s name and address proof, along with the proposed Director Identification Number (DIN) once it has been created.
| Applicants will no longer need to file Form DIR-3 separately. DIN can now be obtained in the SPICe + form itself. |
Filling of Forms via SPICe+
The form has two parts, namely
- Part A – Name approval
- Part B – Incorporation of company
Stakeholders can avail of 5 different services in one form by applying for Incorporation of a new company through the SPICe+ form (INC-32).
- Name reservation
- Allotment of director identification number (DIN)
- Incorporation of a new company
- Allotment of PAN
- Allotment of TAN
An email is sent as soon as the eForm is processed, containing the certificate of incorporation (COI). Our team of experts will be happy to provide you with more information about completing the SPICe+ form (INC-32).
The Takeaway
If you need assistance or if you want it handled quickly, consider Vakilsearch’s OPC incorporation. Our experts will complete all paperwork and oversee all compliance formalities for you.