When a person starts to build a business is exciting, but handling the business and all the legal and regulatory steps can feel overwhelming. If you’re an individual entrepreneur looking for a simple and effective way to handle your business, One-Person Company Registration (OPC Registration) might be the perfect option. It offers the benefits of a corporate setup without the need to manage partners or directors.
In this article, we will explain what is OPC, how to register, and why these are great options for solitary business owners. It helps you cover important related company registration topics like GST, Trademark, and ITR Filing to easily facilitate you in setting up your firm smoothly.
What is a One-Person Company (OPC)?
A One-Person Company introduced under the Companies Act, 2013. It permits a sole individual to own and run a company, combining the flexibility of a sole proprietorship with all the advantages of a corporate structure like limited liability and a separate legal identity.
Important Features of OPC
- Single Owner: Only one individual is allowed as a member or shareholder.
- Limited Liability: The member’s liability is limited only to the value of the shares held.
- Separate Legal Entity: There is a separate legal identity between the owner and the OPC.
- Ease of Compliance: The compliance requirements are relatively simpler compared to other company types.
Benefits of Registration of One-Person Company
One-person company registration provides the following advantages.
- Protected Liability
Unlike sole proprietorships, OPCs give limited liability with the owner’s personal assets sheltered from business liabilities. - Independent Legal Personality An OPC is recognized as an entity independent in the eyes of the law, with such capacity to own assets and enter into contracts and sue or be sued.
- Easy Resolution
Since there is only one member, decisions can be taken quickly without having to hold board meetings or seek advice from partners. - Ease of Funding
OPCs are more reliable for investors and lenders than a sole proprietorship and therefore easier to raise funds. - Continuity
The nominee structure ensures that the OPC continues even after the death of the owner, providing business continuity.
Step-by-Step Process for One-Person Company Registration
- Obtain a Digital Signature Certificate (DSC)
The first step is to get a DSC for the proposed director. A DSC is necessary for electronically signing documents submitted to the Ministry of Corporate Affairs (MCA). - Apply for a Director Identification Number (DIN)
DIN for the proposed director: The MCA issues a unique identification number referred to as DIN. - Name Reservation
Set a distinctive name for your OPC and check its availability on the MCA portal. The name of the OPC should be in compliance with the naming regulations provided by the Companies Act. - Prepare and File Memorandum and Articles of Association (MOA and AOA)
The MOA and AOA detail the objectives and operational rules of your OPC. These documents need to be filed with the MCA. - File Incorporation Forms
File the incorporation application (Form SPICe+) along with the supporting documents, which include:- Proof of identity and address of the director.
- Address proof of the registered office.
- Nominee’s consent in Form INC-3.
- Obtain the Certificate of Incorporation
Once your application is approved, the Registrar of Companies (ROC) will issue the Certificate of Incorporation. Your OPC is now officially registered!
Mandatory Registrations for an OPC
- GST Registration
If your annual turnover exceeds ₹20 lakhs (₹10 lakhs for special category states) or if you are involved in inter-state supply of goods/services, then GST Registration is compulsory. You must get registered well in advance to avoid the late registration fee and also ensure the smooth running of business operations. - Trademark Registration
Securing a Trademark Registration safeguards your brand name, logo, or tagline from misuse by others. This is important to develop a strong brand identity in the market. - ITR Filing
Each OPC must file an ITR annually, even if there is no income. Proper ITR filing ensures compliance with tax laws and facilitates benefits or refunds.
Comparison of OPC with Sole Proprietorship
| Feature | One-Person Company | Sole Proprietorship | |
|---|---|---|---|
| Legal Status | Separate legal entity | Not a separate legal entity | |
| Liability | Limited | Unlimited | |
| Compliance Requirements | Moderate | Minimal | |
| Continuity | Perpetual | Dissolves with owner’s death | |
| Taxation | Corporate tax rates apply | Personal income tax rates |
Role of Professionals in OPC Registration
The simplified procedure does not prevent technical complications, which a professional may be required to handle. Experts can assist with:
- Filing error-free incorporation documents.
- Securing GST Registration, Trademark Registration, and other necessary licenses.
- Ensuring compliance with annual ITR Filin and company law requirements.
Frequently Asked Questions (FAQs)
- Who can register an OPC?
Any Indian citizen who is a resident in India can register a One-Person Company. - Can an OPC have more than one director?
Yes, even though there is only one member, an OPC can nominate up to 15 directors. - Is GST Registration compulsory for an OPC?
Yes, GST Registration is mandatory in case your turnover crosses the threshold limit or in case of inter-state supplies. - Can an OPC convert into a Private Limited Company?
Yes, an OPC can opt to become a Private Limited Company if the conditions under the Companies Act are met.
Conclusion
One-person company Registration is the best option for single entrepreneurs who intend to set up a legitimate and scalable business model. An OPC provides limited liability, better funding opportunities, and a separate corporate identity.