Company Registration

OPC Registration Doesn’t Have To Be Hard. Read These Simple Steps

One-person Company is the company, where there is only one Promoter/founder. As per the Companies Act 2013, One-Person-Company  is the important milestones to encourage self-employment with a backbone of India’s legal system.

One Person Company requires only 1 member and in, case of death or any other incapacity of the original member (1 nominee, who becomes the member of the company).

Note – Here, member refers to someone who subscribes to Memorandum and has their name in the Register of members and holds shares of the company with their name in the records of depository.

What is the Eligibility criteria for OPC Registration?

1. Only a natural person who is a resident of India in the preceding calendar year can form OPC.

Note – Resident means who stayed in India for 182 days in the preceding calendar year.

1. A person cannot incorporate more than one OPC or be the nominee of more than one OPC.

1. Threshold limit of paid-up capital is Rs 50 lakh and Average Annual turnover is Rs 2crore in immediately preceding financial year. If the OPC exceeds this threshold limit the status of OPC is lost.
2. Only one member can form an OPC.
3. OPC rules do not permit Non-Banking Financial Institutions.

What are the Steps required for OPC Registration?

1. A person (member) is required to get a DSC (Digital Signature Certificate) issued by the Certifying Authority to incorporate an OPC, As DSC ensures the authenticity of all the documents.
2. Incorporation of SPICE through RUN (Name Reservation) –

• For name availability, RUN service shall be used
• After the name reservation, Incorporate OPC for which SPICE Form shall be filed i.e. (Incorporation of the OPC should be done within 20 days from the date of approval of RUN).
• In case the address of correspondence and registered office address is not same, the company shall file form INC-22 within 30 days once form SPICE is registered and the company gets incorporated.
• Allotment of DIN (Director Identification Number).
• Allotment of PAN and TAN by applying for the incorporation of the new company through SPICE form INC-32
• Electronic MOA and AOA through SPICE form (INC-33 AND INC-34).
• In respect of incorporation stating that all the legal requirements of this Act are complied with A declaration by an advocate/CA/CWA/CS must be provided who has been engaged in the incorporation process.
• Consent of a nominee that he/she is willing to be a member of the one-person company.

What are the Advantages of One Person Company Registration in India?

There are certain advantages enjoyed by the OPC mentioned below-

• Not required to Annual General meetings
• Financial statements need not include cash flow statements.
• Provisions related to Independent Director do not apply and Company Secretary is not required to sign returns.
• Additional grounds for vacation of director’s office.
• Provisions of a quorum do not apply exactly as applied in case of a private or public company.

What is the Process if the OPC exceeds the threshold limit or what are the threshold limits for an OPC to mandatorily get converted into Private or Public company?

The OPC has to convert itself into a private or public company mandatorily, If In case the paid-up share capital of an OPC exceeds 50 lakh rupees or its average annual turnover exceeds 2 crore rupees immediately preceding three consecutive financial years.

Further, if the OPC exceeds the threshold limits it is required to be converted into a private or public company and the OPC shall inform the Ministry of Corporate Affairs while filing the form INC-5. INC-5 shall be filed within 60 days of exceeding the threshold limits. Additionally, for the conversion of an OPC into a private or public company. An OPC shall file Form INC-6.

Note – Same in the case of conversion of Private Company or Public Company into OPC, the private company or Public company will also file form INC-6 for converting itself into an OPC.

Criteria of conversion of Private Company into OPC

The paid-up share capital of a private company should not be exceeding 50 Lakh rupees.

Average annual turnover shall not exceed more than 2 crore rupees.

The company shall be having one member and in case of death or incapacity of the member, it shall appoint 1 nominee to act as member at the time of conversion into OPC.

Mandatory Documents Necessary for OPC Registration

To be given by the director One Person Company Director –

• Scanned transcript of the Passport (Foreign Nationals and NRIs) or PAN Card
• Scanned transcript of the Passport, Voter’s ID or the Driver’s License
• Scanned transcript of the Current Bank Account Statement, Phone or Mobile Invoice, Electricity or Gas Invoice
• Scanned passport-sized photo
• Specimen autograph or the impression (blank document with the autograph)

Note – the director of the One Person Company as a mandate should self-attest the first 3 documents. In the case of an NRI or a foreign national, all the document sheets must be notarized without a fail (if he or she is presently in India or a non-Commonwealth nation) or apostilled (that means living in a Commonwealth country).

Mandatory Compliance for OPC Registration

1. Conducting a minimum of two board meetings as stated under the Companies Act, 2013.
2. Statutory audit of the financial statements by the Practising CharteredAccountant
3. Appointment of an Auditor
4. Filing of Income Tax Return
5. Annual filings to the ROC (registrar of companies)
6. Keeping up the statutory registers
7. Form AOC-4 for the financial statement
8. MGT-7 for an annual return

Tax rule for One Person Company Registration?

Filling of the Income Tax Returns (ITR) is a mandatory and obligatory thing for a One Person Company.Tax Deducted at Source (TDS) should also be filed quarterly mentioning the Tax Deduction Account Number (TDS). If a company has employees then deducting tax at source (TDS) become essential.If in case an OPC has more than ten employees then obtaining an ESI registration by law becomes mandatory and necessary. According to the provisions of Income Tax Act, 1964, an OPC is liable to pay 30 per cent of its income to the authorised taxation authority in the fiscal year.

Filling of forms with MCA

All the documents required as annexure must be in the SPIce Form, SPICe-MOA (Memorandum of Association) and SPICE –AOA (Article of Association). Also, provide the Digital Signature Certificate (DSC) of all the directors and the professional concerned, and upload all the details and particulars required to the Ministry of Corporate Affairsportal for the approval.Once the directorhave uploaded the file, he or she will receive the Form 49A and 49B for the Permanent Account Number (PAN) and TAN which have to be uploaded to Ministry of Corporate Affairs (MCA) after affixing the Digital Signature Certificate (DSC) of the proposed Director.

The Time limit for filing INC-6

• In case of Voluntary conversion-within 30 days of such conversion
• In case of Mandatory conversion-within 6 months of such mandatory conversion

In how many OPCs a person can be a member?

A person can be a member of only 1 OPC.

Note – Being member in One Person Company when a person by virtue of his being a nominee in that OPC, becomes a member in another OPC ,in that case such person shall meet the eligibility criteria of being a member in only 1 OPC within a period of 180 days, i.e., the person shall withdraw his/her membership from either of the OPCs within 180 days.

In case of intimation of change in nominee by the member or withdrawal of consent by the nominee of an OPC which form is to be filed?

In case of intimation of change in nominee by the member or withdrawal of consent by the nominee of an OPC Form INC-4 shall be filed which implies

• Any change in the nominee of the OPC by the personal withdrawal of the consent by the nominee himself.
• Withdrawal of consent by the nominee.
• Cessation of the member due to various reasons like death, the incapacity of the member etc.

Conclusion

As per the enactment of the new Companies Act 2013, it has recognized the ability of the individuals forming a company i.e. a single person can form a company effectively as its member. Basically, these companies are formed where there is only one founder and promoter in the business. As sole proprietorship does not offer several advantages that One Person company offers. Taxation policies under OPC shall be applied as applicable in Private limited company. OPC is expected to give a significant impact to uplift the corporate sector in the country and is totally free from the regulatory mess ups.

Also, Read

• Incorporation of Company with Foreign Director
• Various Types of Company Registration in China
• Conversion of Unlimited Liability Company into a Limited Liability Company by Shares or Guarantee