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One Person Company Registration
What is One Person Company?
To understand one-person company definition, we first got to get into the identity it creates. A registration provides corporate status and lots of benefits to the members and directors. In the case of a personal company, a minimum of two members are required which isn't an equivalent within the case of OPC. To eliminate this drawback and allow a single person to reap the advantages of One Person Company, this sort of a company structure is introduced through the Companies Act, 2013. One Person Company registration is simplified with online filing and process.
One Person Company feature is such it's just one shareholder who owns 100% stake of the corporate. To maintain the character of perpetuity, the appointment of the nominee is compulsory, who will take place of the owner in case of death or his inability. One-person company may be a sort of Private Ltd...
A One Person Company would obtain the status of a separate legal entity. Such OPC registration ensures that the entity is break away the owner, unlike a proprietorship firm. OPC can own the assets in its own name and enter into a contract with the parties. The actions of the company are independent of the owner. This is the main benefit of OPC registration.
PAN Card of shareholder, nominee, and Directors.
Aadhar card and Voter ID / Passport / Driving License of Shareholder, Nominee, and Directors.
Latest Telephone Bill / Electricity Bill / Bank Account Statement of Shareholder, Nominee, and Directors.
Latest Passport size photograph of Shareholder, Nominee and Directors
Latest Electricity Bill / Phone bill of the registered office address
No Objection Certificate to be obtained from the owner(s) of registered office
Rent Agreement of the registered office should be provided, if any
One Person Company name should be unique as it forms the company brand, preferably a coined word.
The OPC name format shall have the second part of name suggesting the business activity of the company.
Name of the company must end with “(OPC) Private Limited” as a suffix.
COMPARE DIFFERENT BUSINESS STRUCTURES TO CHOOSE THE RIGHT ENTITY TYPE
| Private Limited Company | One Person Company | Limited Liability Partnership | Partnership Firm | Proprietorship Firm | |
|---|---|---|---|---|---|
| Act | Companies Act, 2013 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 | Indian Partnership Act, 1932 | No specified Act |
| Registration Requirement | Mandatory | Mandatory | Mandatory | Optional | No |
| Registration under the Act is mandatory to set up business as a Private Limited Company | Registration under the Act is mandatory to set up business as One Person Company | Registration under the Act is mandatory to set up business as a Limited Liability Partnership | Both registered and unregistered partnerships are legal, but registered entity is preferred | There is no registration criteria prescribed. But, registration to establish a legal identity is recommended | |
| Number of members | 2 – 200 | Only 1 | 2 – Unlimited | 2 – 50 | Only 1 |
| Requires minimum 2 and not more than 200 shareholders | Only an individual,and an Indian resident can be the shareholder | No bar on maximum number of partners, but minimum 2 Designated Partners are required | It is formed with minimum 2 partners, but not exceeding 50 | The proprietor is the only owner of the firm | |
| Separate Legal Entity | Yes | Yes | Yes | No | No |
| Private Company is separate entity and can own assets in its name | OPC is separate entity and can own assets in its name | LLP is separate entity from partners and can own assets in its name | Partnership firm does not have any separate identity from its partners | Proprietor and business are the same and not different | |
| Liability Protection | Limited | Limited | Limited | Unlimited | Unlimited |
| Liability of members is limited to the extent of unpaid value of shares subscribed | Liability of member is limited to the extent of unpaid value of shares subscribed | Liability of partners is limited to the capital amount agreed to introduce | Partners are jointly and severally liable to pay the debts of the Partnership Firm | Proprietor’s liability is to pay-off all the debts and obligation of a firm | |
| Statutory Audit | Mandatory | Mandatory | Dependent | Not mandatory | Not mandatory |
| Auditor must be appointed within the 30 days of incorporation | Auditor must be appointed within the 30 days of incorporation | Applicable when turnover exceeds INR 40 Lakh or contribution exceeds INR 25 Lakh | Statutory audit not applicable. Tax audit may be applicable based on turnover | Statutory audit not applicable. Tax audit may be applicable based on turnover | |
| Ownership Transferability | Restricted | No | Yes | No | No |
| Shares can be transferred with the consent of other Shareholders | Shares are not transferable easily | Ownership can be changed with consent of other partners | Ownership is not transferable easily, clause of partnership deed should be referred | Firm is no different from proprietor and so ownership is not transferable | |
| Uninterrupted Existence | Yes | Yes | Yes | No | No |
| Change in members or director does not affect the existence of Private Company | Change in members or director does not affect the existence of OPC. The nominee will take place of member | Change in Partners or Designated Partners does not affect the existence of LLP | Change in partner leads to dissolution or formation of another partnership firm | Death or insolvency of proprietor directly affects the firm | |
| Foreign Participation | Allowed | Not Allowed | Allowed | Not Allowed | Not Allowed |
| Foreign national are allowed to invest under the Automatic Route | Member, nominee and director must be an Indian resident | Foreign nationals are allowed, subject to FDI Guidelines | Foreign nationals are not allowed to be a partner | Foreign Nationals cannot commence proprietorship business | |
| Tax Rates | Moderate | Moderate | High | High | Low |
| Tax rate applicable for small companies is reduced to 22% | Tax rate applicable for small companies is reduced to 22% | With tax rate of 30% on business profit, tax benefits to partners is high | With tax rate of 30% on business profit, tax benefits to partners is high | Tax rates of individual applied to Proprietorship Firm | |
| Statutory Compliances | High | Moderate | Moderate | Less | Less |
| Apart from Annual filings, it has to comply with various provision laid down, but less compared to public company | Apart from Annual filing, compliances are less compared to Private Company | Annual filing and few event based filings are necessary | Separate ITR of partnership is filed, else there is no filing requirement | No compliances and no requirement to file a separate ITR |
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