A One Person Company (OPC) is a type of company where there's only one owner. It's like a private limited company but with a single shareholder. Being an OPC comes with perks like access to bank loans, limited liability, and legal protection. According to the law, the person and the company are seen as separate, so if the company faces financial trouble, the owner isn't personally responsible for debts. An OPC can even raise money by selling shares. It's eligible for government support and helps budding entrepreneurs with ideas get started in the business world. OPCs are like a one-man team, allowing individuals with big dreams to launch their own company and enter the market.
Characteristics of One Person Company
In an OPC, the owner's liability is limited. The company continues to exist even if the owner changes. OPCs can't ask the public for money. There's no minimum money needed to start an OPC. It must have "OPC Private Limited" in its name. If the money or sales go above certain limits (more than Rs.50 lakh or Rs.2 crore turnover), the OPC must become a Private Limited Company.
An OPC needs a nominee, someone who can take over if the owner can't continue. The company must have an official address. Directors need a DIN (Director Identification Number), and both directors and subscribers should have a DSC (Digital Signature Certificate).
For Indian citizens becoming directors or shareholders, these documents are needed:PAN card, Aadhar card, proof of address (like a bank statement or phone bill), and passport-sized photo.
If the director or shareholder is a foreign national, they'll need to provide address proof, proof of nationality, and Two passport-sized photos and a passport copy.
Register office documents.
If the office is rented, you'll need the rental agreement. An electricity bill (not older than two months) is also required. The person using the space must get a NOC (No Objection Certificate) from the landlord to run the business.
Procedure to register
Step 1: Name Application
Apply for the company name with the Registrar of Companies. You can give two name options and have one chance to make changes.
Step 2: Name approval/Rejection
The Central Registration Centre reviews the application and either approves or rejects the name.
Step 3: Application for DSC
Get Digital Signature Certificates (DSC) for all subscribers and directors of the company.
Step 4: Preparation of MOA and AOA
Draft the Memorandum of Association (MOA) and Articles of Association (AOA). Attach the DSC to both documents.
Step5: Forms and the document filing
Submit the application to register the One Person Company along with MOA and AOA. Pay the required fees and provide supporting documents.
Step 6: Certificate of Incorporation
Once the Registrar of Companies is satisfied, they issue the Certificate of Incorporation. You'll also receive the Director Identification Number (DIN), Permanent Account Number (PAN), and Tax Deduction and Collection Account Number (TAN).
Certain individuals like minors, foreign citizens, Non-Resident Indians (NRIs), and those unable to enter into contracts are not allowed to start an OPC in India.
An Indian citizen can serve as both the member and nominee of the Trust.
An OPC must have at least one director. It can have a maximum of 15 directors.
- Corporate income tax is set at 30% of the total income.
- There's an additional surcharge of 5% on that income.
- Education cess is 3% of the total income.
- Dividend Distribution Tax is fixed at 15%.
A company has the flexibility to change its registered office address. The new address can be within the same state or in a different state from the registered address of the OPC.
The director's ability to run the company varies based on the type of director role they hold.
An OPC boosts business credibility with financial institutions, suppliers, and potential clients, enabling companies to secure loans and engage in deals confidently.
Only one person can become a nominee.