One Person Company (OPC) Registration

Legal Standing

The member grants the OPC registration a separate legal entity status. The sole person who incorporated the OPC is protected by its distinct legal status. The member is not personally liable for the company’s loss; instead, his or her liability is limited to the value of the shares that he or she owns. Therefore, the OPC and not the member or director may be sued by the creditors.

Easy Access to Funding

One person company registration in India can easily raise money through venture capital, angel investors, incubators, and other sources because it is a private company. Getting money is now simple.

Less Conformity

One person company registration is given some exemptions from compliance requirements under the Companies Act of 2013. The OPC is not required to prepare the cash flow statement. The secretary of the company is not required to provide any annual reports and maintain any account books.

Easy Integration

And one person company in India can be easily integrated without any legal hassles. A member also serving as a director should provide the approval for integration. There is no minimum paid up capital requirement.

Easy to Manage

Administration of the OPC can be made simple by allowing a single person to both find and lead it. Making decisions is straightforward, and it happens quickly. The member can easily pass both ordinary and special resolutions by writing them down in the minutes book and getting just one other member to sign them. Because there won’t be any internal disputes or delays, managing the company will be easy.

Constant Repetition

The OPC has the function of perpetual succession even with only one member. A nominee must be chosen by the single-member when incorporating the OPC. The candidate will take over operation of the company in the event that a member passes away.

• Maximum and minimum membership requirements must be met
• There should be a nominee chosen before incorporation
• Use Form INC-3 to request the nominee’s approval
• The Companies (Incorporation Rules) 2014 mandate that the OPC name be selected
• Minimum authorised capital of ₹1 Lakh
• DSC of the potential director
• Evidence of the OPC’s registered office.

Certain compliances are outlined in the Companies Act of 2013 and must be met by the specified deadlines. These regulations provide openness, good governance, and safeguard the interests of all parties involved, including the ROC, shareholders, directors, investors, and tax authorities. These compliances can be divided into annual compliances, recurring compliances, post-incorporation one-time compliances, and compliances dependent on events. The first category of one-time compliances has been thoroughly covered here.

One Time Compliance

• Step 1: Check the eligibility and documentation
• Step 2: Request DSCs and DINs for each director
• Step 3: Submit a request for a name reservation Form Spice+ for company incorporation
• Step 4: Apply for PAN and TAN for your new business
• Step 5: RoC issues an incorporation certificate with a PAN and TAN
• Step 6: Open a bank account and start your business.

The whole process for one person company registration can be completed in a time span of just 20 days. All you have to do is reach out to Vakilsearch and complete the process with no delay.

Vriddhi Registration Package for One Person Company in India

• • Vriddhi registration package provides a Digital Signature Certificate online for one of your director’s
  • We will also provide a Directors Identification Number (DIN) (If the shareholders are different from directors, then additional DSC is required for shareholders)
  • Our Business experts will provide assistance with deciding the company name
  • PAN and TAN, drafting the articles of association, paying the government stamp duty and the certificate of incorporation fee, obtaining the name approval certificate, and registering for GST, PF, ESI, and PT (only applicable in Maharashtra) will be done with utmost care and speed
  • A Zero balance current account will be opened in DBS or ICICI.

Easy Succession

Despite having a single person running all the daily activities of the company, OPC provides options for perpetual succession. After the demise of a member of the company, the nominee can run the company.

Limited Liability

The member in a one-person company has limited liability. Since OPC is a registered company it is treated as a separate legal entity providing greater protection to its members. The liability of the member is limited to their shares so they are not liable for any losses conducted in the company. In case of bankruptcy, the creditors can sue the company and not the director of the company for procuring the company’s debt.

Sole Directorship and Shareholder

In one person company registration a single member acts as a director so they stand liable for managing the company’s day-to-day activities. In this case, there is no need for an executive director to run the daily needs. A single member is more than sufficient and acts as a shareholder with all responsibilities.

Ownership in Property

Since the OPC is treated as a separate legal entity the person has the right to hold property related to business and other assets in their name. The properties including machinery factories, residential property, buildings, and other assets cannot be claimed by another person. As per law, the one person company registration can acquire property directly under its name.

Despite having major advantages, one person company registration also comes with a certain set of restrictions.

Not Apt for Scalability

Registering your business as an OPC is a perfect option for a small business structure. However, if you are planning to scale it up on greater levels then this might not work.at any given time the total number of people in an OPC is always one. If you are planning to add more members and have more shareholders you cannot register your business as OPC. So OPC registration is not apt to raise further capital. This will inhibit the expansion and growth of businesses.

Higher Restrictions on Business Activities

As per the rules and regulations, OPC is not permitted to conduct non-banking financial investment activities. Registering yourself as an OPC will not provide freedom to invest in the security of other corporations.

No Clear Distinction Between Ownership and Management

Since the one-person company has a single person to act as both the director of the company and the management there is no clear distinction between both roles. A single person is permitted to take and approve all the decisions. So, there are higher chances of unethical practices.