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Incorporating a One Person Company (OPC) in India is a simplified process governed by the Companies Act, 2013. The OPC structure allows a single individual to form a company while enjoying the benefits of limited liability and a separate legal entity. Below is the step-by-step process:
Step: The individual forming the OPC must obtain a Digital Signature Certificate (DSC). The DSC is needed to digitally sign electronic forms submitted to the Ministry of Corporate Affairs (MCA).
Documents Required: Passport-sized photo, address proof, PAN card, and identity proof.
Step: The single director of the OPC must apply for a Director Identification Number (DIN). This can be done through the SPICe+ form during the incorporation process if the director does not already have a DIN.
Note: Only one DIN is required as an OPC can have only one director initially.
Step: Choose a unique name for your OPC. Apply for the Reserve Unique Name (RUN) service on the MCA portal to get approval for the company’s name.
Note: The name should comply with the Companies (Incorporation) Rules, 2014. You can submit up to two names, and the MCA will approve one if it is unique and follows the naming guidelines.
Step: Prepare the Memorandum of Association (MoA), which defines the objectives of the company, and the Articles of Association (AoA), which outlines the company’s internal governance rules.
Special Clause for OPC: The MoA must specify the nominee (a person who will take over the company’s ownership in case the sole member dies or becomes incapacitated).
Step: File the SPICe+ form (Simplified Proforma for Incorporating Company Electronically) for incorporating the OPC. This integrated form allows you to:
Apply for name reservation (if not done via RUN).
File for incorporation.
Apply for DIN.
Apply for PAN and TAN (for tax registration).
Documents Required:
MoA and AoA (signed by the sole director and the nominee).
Declaration by the director (Form INC-9).
Proof of registered office (rent agreement, utility bills, NOC from the property owner).
PAN and address proof of the sole director and nominee.
Step: Stamp duty is payable depending on the authorized capital of the company and the state in which the registered office is located. The payment is processed during the filing of the SPICe+ form.
Step: Once the MCA approves the incorporation form, the Certificate of Incorporation (COI) is issued. The COI contains the Corporate Identity Number (CIN) of the company and confirms its legal existence.
Time Frame: Usually issued within 5-7 business days after form submission.
Step: Along with the COI, the OPC is automatically allotted a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN), both of which are required for tax filings.
Step: With the COI, PAN, and other required documents, the OPC can open a bank account to conduct business transactions.
GST Registration: If the OPC’s annual turnover exceeds ₹20 lakhs (₹10 lakhs for certain states) or if the business involves inter-state trade, Goods and Services Tax (GST) Registration is mandatory.
Shops and Establishment Registration: Required in certain states if the OPC operates a physical office.
Professional Tax Registration: Needed in states like Maharashtra or Karnataka where professional tax is applicable.
Annual Compliance: OPCs must file annual returns, including the Financial Statements (Form AOC-4) and Annual Return (Form MGT-7).
Memorandum of Association (MoA) and Articles of Association (AoA).
PAN and Address Proof of the sole director and nominee.
Proof of Registered Office Address (utility bill, NOC, rent agreement).
Identity and Address Proof of Director (Aadhaar, Passport, Voter ID, etc.).
Single Ownership: Only one person acts as both shareholder and director.
Limited Liability: The personal assets of the sole owner are protected from the company’s liabilities.
Separate Legal Entity: The OPC enjoys a separate legal status from its owner.
Nominee: The nomination of a successor ensures business continuity in case the sole member is incapacitated.
Incorporating a One Person Company (OPC) is an excellent choice for solo entrepreneurs who want the legal protection of a company with limited liability. It offers a middle ground between sole proprietorship and private limited companies, providing the flexibility of a proprietorship but the added benefits of limited liability and a separate legal entity. The simplified incorporation process, combined with fewer compliance requirements compared to other corporate structures, makes the OPC a good option for individual business owners aiming to expand without taking on partners.