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INTRODUCTION OF OPC IN INDIA

 

 

 

 

 

Before the enactment of the Companies Act, 2013; there was no concept of One Person Company (OPC) in India. If a person wanted to carry on his own business without dilution of control in business, he may have formed a Sole Proprietorship firm or HUF. With the advent of OPC Registration becoming a reality and alternate form of business for Solopreneurs, there has been surge in the number of businesses who got registered and enjoyed all the features and benefits which only a company form of business has to offer.

OPC Private Limited provides a combination of Limited liabilities Feature along with full control over the business as there is only one Member/ Shareholder in OPC type of Private Limited These are the few reasons why Registration of Company in the form of OPC Registration have significantly increased over these years and preferred by Entrepreneurs who were earlier doing freelancing in Proprietorship Firm.

WHAT IS ONE PERSON COMPANY (OPC)?

According to Section 2(62)of the Companies Act, 2013:

“One Person Company” means a company which has only one person as a member. That means OPC is a company in which only one member is required to incorporate a company.

Note: While incorporating an OPC Private Limited, the single member needs to appoint a nominee who will become the member of such OPC after the death of present member. The nominee will run the company in the member’s place. Not only this, if the owner of OPC wants to change the Nominee anytime in future, he can do so with MCA.

WHAT ARE THE BENEFITS OF OPC REGISTRATION?

A small entrepreneur wants to establish a business in which he will get the benefit of Limited Liability along with full control in business. OPC is the form of organization which provides the dual benefit under one roof.

Among various benefits of OPC, some are mentioned below:

• Separate Legal Entity: One Person Company Private Limited is also a company duly registered under MCA and it is considered as a Separate Legal Entity from the Member. OPCprovides the protection to the member of OPC. The liability of the member is limited to his shares, and the member is not personally liable for the loss of the company. OPC can sue and be sued by its own name, that means the creditors can sue the OPC and not the member or director per se.

• Easy fund raising: Investors, like Venture Capitals, Angel Investors, Incubators, etc. prefer to invest in Private limited company rather than LLP or sole Proprietorship firm. Since OPC is a private company, it is easy to go for fundraising as OPC has the easiest option to convert itself to a full-fledged Private Limited Company by introducing one more member. Note that there should be a minimum of two directors (if not already). The Banks and the Financial Institutions also prefer to grant loans to a company. Thus, fund raising becomes much easier for small entrepreneurs with a company type of business.

• Lesser Burden of compliances: There are several exemptions from compliances provided by the Government under the Companies Act, 2013 for OPCs. Thus, the OPC has lesser compliance burden than other forms of companies.

• Easily managed: As there is no need to dilute the equity capital of the company. The entire control of an OPC is in the hands of one person (Member of OPC). It will help in quick decision making and results in easy management of business.

WANT TO REGISTRATION OF OPC IN INDIA? 

To register an OPC in India is an easy task as only one member and one nominee is required for its incorporation. The member can becomea director too in all practical cases it has been observed that the Member of the OPC Private Limited is the Director. You just have to follow the few simple step as discussed below in the write up.

LET US DISCUSS THE PROCESS OF REGISTRATION OF OPC IN INDIA

STEP 1: Obtain Digital Signature Certificate (DSC):

T0 application for Registration of OPC is submitted online after digitally signed by the director and shareholder of the company. For signing the registration application digitally DSC is required to be obtained from the Certifying authorities like- V-sign, eMudhra, etc.

STEP 2: Application for Company Name Reservation:

Filing separate application for Name reservation is optional. Applicant may file the name of OPC along with the complete Incorporation form directly. However, if the applicant wants to reserve the name first, he may file Form SPICe+ Part A along with fees of Rs. 1000. Once the name is approved by the Department (CRC), it will issue a Name Approval letter. The name is reserved for twenty days from the date of name approval letter and available for further extension on additional fees for 40/60 days.

STEP 3: Compilation of KYC Documents for OPC Registration:

• KYC document of Member/ Director/Nominee:
• Self-attested copy of PAN
• Identity Proof – Self-attested copy of Voter Id/ DL/ Passport (Nominee may also provide Aadhar for Identity proof)
• Residential Address Proof – Self-attested copy of Bank Statement/ Electricity Bill/ Mobile Bill/ Telephone Bill (Not older than 2 months)
• Passport size Photo

• Proof of Registered office address:
• Utility bill – Telephone Bill/Mobile Bill/Electricity Bill/ Gas Bill/etc. (Not older than 2 months)
• No Objection Certificate from owner of the Property
• Notarized Rent Agreement or Lease Deed between the Company and the owner of the Property (Where the property is owned by any person other than the Member/ Director.

STEP 4: Prepare Incorporation Forms:

Once all the documents are compiled, we need to prepare Form SPICe+ Part B, eMOA, eAOA, AGILE PRO-Sand INC-9. The following documents shall be attested along with the SPICe+ forms:

• All basic documents mentioned above.
• DIR-2: Consent from Proposed Director to act as Director of the Company
• DIR-8: Intimation regarding disqualification of director, if any.
• INC-3: Declaration by Nominee of the OPC to act such.
• INC-8: Professional certification by PCS/ PCA/ PCMA/ Advocates.
• Specimen Signature of Employers (Employer may be Members or Directors of the OPC)

STEP 5: Submission of Incorporation Forms and make payment:

Once all the forms are ready, the lasts step is to affix the DSC of Member, Director and practicing Professional wherever it is required and upload the forms on MCA portal at www.mca.gov.in

Subsequently after uploading the Incorporation form a challan will generate containing two SRNs. Make the payment of both challans and let the Department scrutinize your submission.

STEP 6: Issuance of Certificate of Incorporation (COI) along with PAN & TAN:

If the Department finds all Incorporation forms in order, it will approve the same and issue COI, PAN, and TAN of the OPC. If the Department observed some discrepancies in the forms, the forms will be marked as ‘Sent forResubmission’ and the applicant has to resubmit the same after removing all the discrepancies within time prescribe in resubmission order.

FREQUENTLY ASKED QUESTIONS (FAQS):

Q1. Who is eligible to become member of OPC?

Ans. Only a Natural Person who is an Indian Citizen, not being a minor, can become a member or nominee of OPC.

Q2. Can a Natural Person be a member of one OPC and a nominee of another OPC at the same time?

Ans. Yes, A Natural Person can be a member of one OPC and a nominee of another OPC at the same time. However, a Person shall not be a Member of two OPCs, and also a Person shall not be a Nominee of two OPCs, at any point of time.

Q3. Is it mandatory to convert an OPC into Private Limited Company if it’s Paid-up Share Capital exceeds fifty lakh rupees or its average Annual Turnover of immediately preceding three consecutive financial years exceeds two crore rupees?

Ans. No, the requirement of mandatory conversion of OPC has been deleted by MCA through Companies (Incorporation) Second Amendment Rules, 2021.

Do you still have questions in mind? Contact Compliance Calendar LLP atinfo@ccoffice.in or ping me on 9988424211. We will be happy to assist you in Registration of your OPC including drafting of all drafts required in the Process of OPC Registration. We have a dedicated team of Professions who are well versed with Corporate Laws. We will make sure that none of your query remain unresolved.