Cost of Registering One Person Company
Introduction
Understanding the cost of business is the key to run a business successfully. This cost depends upon multiple factors including cost of registration, compliance and regulations, cost of goods and services. The lower the cost of business easier it will be to operate.
In this article we will discuss about the cost of registering a One Person Company (OPC) and aspects related there to.
First of all, we will learn about basics of One Person Company (OPC).
One Person Company (OPC): Meaning
As per section 2(62) of Companies Act, 2013 One Person Company Means a company which has only one person as its member.
In general sense OPC refers to a private company which has only one person as its member. And such person should be individual, Indian citizen whether resident of India or not.
Characteristics or features of OPC registration:
- Private Company: According to Section 3 of Companies Act, 2013 OPC is basically a Private Company.
- Single Member: An OPC consist of a single person, who must be an individual and citizen of India whether resident or not.
- Nominee: The sole member of OPC is mandatorily required to appoint a nominee who in the event of death or incapacity to contract of member will become the member of the company.
- Minimum one Director: An OPC shall have minimum one and maximum 15 directors. Even more then 15 directors can be appointed by passing special resolution.
- Liability: The sole member of OPC has liability to the extent of shares held by him.
- No minimum Paid up share capital: there is no minimum share capital prescribed by Companies Act, 2013 for registration of OPC.
Advantages and Disadvantages of OPC registration
| Advantages of OPC registration | Disadvantages of OPC registration |
| There are number of exemptions which has been granted to OPC and therefore lesser compliance burden as compared to other forms of companies. | Limited membership (only one member is allowed to incorporate an OPC) |
| It is more organised form of sole proprietorship business. | It is suitable for only small businesses. |
| It includes minimum requirements to incorporate a company. | In case of OPC the line between ownership and management gets blurred if sole member becomes the sole director of the company, which can lead to fraudulent practices. |
| Liability of sole member is limited to the extent of share capital held by him. | A person is not allowed to incorporate or become member of more than one OPC at a time. |
| Easy to get loans from banks as compared to proprietary firm | OPC is not allowed to carry on non-banking financial activities. |
| Easy to Manage an OPC | OPC can not be incorporated or converted into section 8 company. |
OPC registration in India An OPC due to its fewer compliance requirements and considering various exemptions granted can be relatively easy to incorporate and manage as compared to other corporate structures.
The step wise procedure for registration of OPC are as follows:
Step-1 Obtaining Digital Signature Certificates of Sole member and director
DSCs are mandatory to authenticate forms and documents to be field to various government departments including Registrar of companies (ROC), therefore they must be obtained from DSC issuing agencies.
Step-2 Obtaining DIN (Director Identification Number) of first directors
The persons who are proposed to be appointed as first directors of the company are mandatorily required to obtain DIN. The application for same is to be made in form DIR-3.
It should be noted that DIN up to 3 directors can be applied in form SPICe Plus itself to be filed during incorporation of OPC.
Step-3 Checking Name Availability and filing application for name reservation
The availability of proposed name of OPC is to be checked in MCA portal and Public search on Trademark portal.
Once name is found available application for name reservation is to be made in form SPICe Part A separately or in integrated from SPICe plus.
Once name approval letter is received, name is reserved for 20 days which can be extended for 20 days and further for 20 days (Max. 60 days) on filing extension application along with additional fees.
Step-4 Pre-requisites for OPC registration
- Memorandum of Association and Articles of Association
- A nominee appointed by the sole member after obtaining his written consent
- ID and Address proof of Sole member and First directors
- Address proof of registered office of the company
- Professional certification by CA/CS/CMA in practice along with declaration in form INC-8
- Details regarding authorised and paid-up share capital of OPC
- Business Activity of OPC along with NIC code of company
Step-5 Filing of forms to ROC
Once all the attachments are ready incorporation application is to be field in form SPICe plus Part-B along with SPICe MOA, SPICe AOA, AGILE-PRO-S and INC-9.
Step-6 Payment of stamp duty and filing fees
Stamp duty depends upon the Authorized Share Capital and state where Registered Office of the company situated.
Step-7 Certificate of Incorporation
Once documents and forms are duly verified by ROC and approved company stands incorporated and Certificate of incorporation gets generated.
Cost Of Registering An OPC
| Particulars | Cost involved |
| DSCs of Subscriber and first directors | Rs.1000 to 2000 per DSC. Rest it depends upon the discretion of DSC issuing agency.
|
| Fees For Name Reservation | Rs 1000 per Application, however this cost can be saved if application is filed in integrated from SPICe plus along with incorporation application |
| Stamp Duty Fees | It depends upon the authorized share capital of the company and the state where registered office of the company is proposed to be situated. http://www.mca.gov.in/mcafoportal/enquireFeePreLogin.do Please refer this link to know exact fees basis of your state and capital |
| Payment For PAN And TAN | Government fees for Rs. 65.00 and Rs. 66.00 for allotment of PAN and TAN |
| Professional Fees | For incorporation of OPC consultation and professional certification of CA/CS/CMA in practice is required, the professional charges for which are subject to their discretion |
Hope you liked this write-up, if you have any suggestions for us then please let us know in the comments section, we are always ready for new suggestions.
If you are looking for professional assistance relating to OPC registration or Private company registration, then please contact our team of experts at Compliance Calendar LLP at info@ccoffice.in or connect with our team at 9988424211 and we would be happy to support you.