One Person Company (OPC) is a popular business structure in India that allows a single entrepreneur to establish a company with limited liability. OPC company registration was introduced in India in 2013 as part of the Companies Act, and since then it has become a popular option for small business owners who wish to operate as a separate legal entity.
What is OPC?
An OPC is a type of private limited company that is owned and managed by a single person. Unlike a sole proprietorship, an OPC has a separate legal entity and enjoys limited liability protection. This means that the personal assets of the owner are separate from the company’s assets, and the owner’s liability is limited to the amount of capital invested in the company.
Benefits of OPC Company Registration
- Limited Liability Protection: One of the biggest benefits of OPC company registration is the limited liability protection it provides to the owner. This means that in the event of any legal or financial trouble, the personal assets of the owner are not at risk.
- Ease of Formation: The process of registering an OPC is simple and easy compared to other forms of company registration. It requires only one person as a shareholder and director, and there is no need to appoint additional directors.
- Perpetual Existence: An OPC has a separate legal entity, which means that the company’s existence is not dependent on the owner. The company continues to exist even after the owner’s demise.
- Better Credibility: An OPC is a separate legal entity, which means it has a better credibility in the eyes of customers, vendors, and investors. This is particularly beneficial for small businesses that need to establish credibility in the market.
- Access to Funding: An OPC can easily access funding from banks and financial institutions, which may not be possible for sole proprietors or partnerships.
Requirements for OPC Company Registration
To register One Person Company in India, the following requirements must be met:
- One Shareholder: The company must have only one shareholder, who is also the director of the company.
- One Nominee: The shareholder must nominate a nominee who will take over the company in the event of the shareholder’s demise or incapacity.
- Registered Office: The company must have a registered office in India, which can be the owner’s residence or any other commercial space.
- Minimum Capital: The company must have a minimum paid-up capital of Rs. 1 lakh.
- Compliance: An OPC is required to comply with all the regulatory requirements of the Companies Act, such as maintaining proper books of accounts, filing annual returns, conducting annual general meetings, etc.
Process of OPC Company Registration
The process of OPC company registration is as follows:
- Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the director/shareholder.
- Choose a unique name for the company and obtain approval from the Registrar of Companies.
- Prepare the Memorandum of Association (MoA) and Articles of Association (AoA) of the company.
- File the incorporation documents, along with the MoA and AoA, with the Registrar of Companies.
- Obtain the Certificate of Incorporation (CoI) from the Registrar of Companies.
Conclusion
OPC company registration is a popular business structure in India that provides limited liability protection to the owner, while also offering ease of formation, perpetual existence, better credibility, and access to funding. However, it is important to ensure that all the regulatory requirements are met to ensure the smooth functioning of the company. Therefore, it is advisable to seek the assistance of a professional firm for OPC company registration to ensure compliance with all the legal formalities.