One Person Company, also known as OPC, is a type of a business entity that functions independently, and has a single shareholder with limited liability.

Yes, a single person is eligible to incorporate One Person Company (OPC), which is among the most popular form of company registered under the Companies Act, 2013.

One Person Company is a type of a private limited company formed by one shareholder that enjoys the benefits such as status of a separate legal entity, limited liability, credibility and tax benefits.

Yes, since an OPC is meant for small business operations, it can be converted to a private limited company if its annual turnover limit exceeds Rs. 2 crores.

It usually takes between 7 to 10 working days to register an OPC in India, subject to document verification and approval.

Earlier, an OPC could only be incorporated by a resident of India. However, after the Companies (Incorporation) Second Amendment Rules, 2021, NRIs are now eligible for the incorporation of one person company in India.

Yes, every single individual comprising at least 1 nominee and 1 director can register their OPC directly on the SPICe+ portal.

The natural and legal Indian citizens and non-resident Indians are eligible for one person company registration in India. In order to register one person company in India, it’s essential to understand the requirements.

The process required to set up a one person company allows the applicant to obtain a Digital Signature Certificate (DSC) and a Directors Identification Number (DIN), reserve the name and lastly file the forms/ mandatory documents for the issuance of certificate of incorporation.

OPC which stands for one person company are suitable for single entrepreneurs looking for limited liability, whereas, LLP is beneficial for businesses having multiple shareholders and seeking flexibility in their limited liability.

According to the provisions of Companies Act, 2013, the minimum capital required for one person company registration is Rs. 1 lakh.

Yes, GST registration is mandatory for one person companies supplying goods and services outside the state.

Yes, OPCs can have a maximum of at least 15 directors.

Yes, an OPC can be voluntarily converted into a private limited company only upon the fulfilment of the condition, by passing a special resolution.

Yes, online OPC registration is possible directly through the SPICe+ portal.

Yes, since an OPC is meant for small business operations, it can be converted to a private limited company if its annual turnover limit exceeds Rs. 2 crores. To initiate this conversion process, follow these steps:

1. Pass a Special Resolution: Begin by passing a special resolution, which is a formal decision approved by the members of the company. This is essential to move forward with the conversion.

2. Increase Members and Directors: The company must increase the minimum number of members and directors to two. This change aligns the company's structure with the requirements of a private limited company.

3. Obtain a No Objection Certificate (NOC): Secure a written No Objection Certificate from your creditors. This step ensures that all financial obligations are acknowledged and addressed before proceeding with the conversion.

By following these guidelines, your business can smoothly transition from an OPC to a private limited company, opening new avenues for growth and investment.

It usually takes between 7 to 10 working days to register an OPC in India, subject to document verification and approval. Here's a closer look at the timeline and factors involved:

1. Certificate of Incorporation: Typically obtained within 3-5 days. This is a crucial step in the registration process.

2. Overall Process Duration: The entire incorporation process spans approximately 10 days. This period accounts for various procedural requirements and approvals.

3. Departmental Approval: Keep in mind that the timeline is subject to departmental approval. Any delays in this area can impact the overall timeline.

By understanding these components, you can better anticipate the steps and time required for the successful incorporation of your OPC.

The next step requires the applicants to reserve a name for the OPC via the submission of the SPICe+ form directly on the Ministry of Corporate Affairs (MCA) portal. However, one must be careful in choosing a distinct name that does not violate any existing company or trademark.

How to Secure Name Approval for Your OPC

1. Decide on the Company Name: The name should follow the format “XYZ (OPC) Private Limited.” This structure is mandatory for all One Person Companies.

2. Submission via SPICe+ Form: You can submit only one preferred name in the SPICe+ application. Be sure to include the significance of the name to strengthen your application.

3. Handling Rejections: If the MCA rejects your chosen name, you will need to submit a new SPICe+ form with an alternate name.

Once your name is approved by the MCA, you can proceed to the next stage of incorporation. This approval is a crucial step, as it establishes your company's identity and ensures compliance with regulatory standards.

The next step requires the applicants to obtain a Director Identification Number (DIN) for the proposed director of the company. It can be done by filing the SPICe+ form through the Ministry of Corporate Affairs (MCA).
To ensure a smooth application process, follow these key points:

1. SPICe+ Form Submission: The DIN application is integrated within the SPICe+ form, allowing applicants to apply for up to three directors simultaneously. This integration streamlines the process, eliminating the need for separate submissions.

2. Required Documentation: Be prepared to provide the director's name and valid address proof. Ensure that all details are accurate and match official records to avoid delays.

3. Update for Existing Companies: It's important to note that Form DIR-3 is now only applicable for existing companies. Since January 2018, new applicants need not file Form DIR-3 separately, as the DIN can be efficiently applied for within the SPICe+ form itself.

This structured approach simplifies obtaining a DIN, ensuring that the process is both efficient and compliant with current regulations.

When it comes to establishing a One Person Company, certain individuals do not qualify under the legal framework:

1. Minors: Individuals under the age of 18 cannot initiate an OPC.

2. Foreign Nationals: Those who do not hold Indian citizenship are ineligible.

3. Non-Residents: Individuals who reside outside India do not meet the criteria.

4. Legally Incapacitated Individuals: Anyone who is unable to enter into a legal contract due to certain incapacities, such as mental health conditions or any other legal disqualifications, is not allowed to set up a One Person Company.

These restrictions ensure that only eligible individuals can take advantage of the benefits offered by an OPC.

1. Ideal Only for Small Enterprises: An OPC is designed for solo entrepreneurs. It limits its membership to a single individual, meaning additional partners or investors can’t join to enhance the business’s financial resources. As the venture grows, this restriction can hinder the scaling process since bringing in new members for increased capital isn’t possible.

2. Limited Business Operations: OPCs face significant restrictions in their scope. They are prohibited from engaging in non-banking financial investment activities. This includes any investments in securities or shares of other corporate bodies. Moreover, OPCs cannot transition into companies with charitable purposes as outlined under Section 8 of the Companies Act, 2013, limiting their flexibility in operation adjustments.

3. Blurred Lines between Ownership and Management: In an OPC, the lone member can also function as the company director, blurring the line between ownership and management. This can concentrate decision-making power, opening the door to potential governance issues or unethical practices. With no other voices in the decision-making process, the balance of power and oversight is significantly reduced.

A person is restricted to being a member of just a single One Person Company (OPC) at a time. This regulation ensures that an individual can only manage or own a single OPC, promoting dedicated attention and effective governance within the business structure. If someone is already a member of an OPC, they cannot join another OPC simultaneously. This limitation is designed to prevent conflicts of interest and reduce the potential for overextension in managing multiple companies, thereby fostering focused and responsible entrepreneurship within this unique business framework.

Essential Documents for Applying for a Digital Signature Certificate (DSC) for an OPC
To begin the application for a Digital Signature Certificate (DSC), pivotal for registering a One Person Company (OPC), you will need to gather a specific set of documents. Here’s a concise checklist to guide you:

1. Proof of Address: Ensure you have valid documents substantiating your residential address. This could include a utility bill, a bank statement, or any government-issued ID displaying your current address.

2. Identification Cards:

    2.1 Aadhaar Card: A national identity proof required for various processes.

    2.2 PAN Card: This serves as a vital identity verification tool, especially in financial matters.

3. Photograph: A recent passport-sized colored photograph is necessary. It's advisable to keep several copies on hand.

4. Contact Information:

   4.1 Email Address: A current, active email address for all digital correspondence.

   4.2 Mobile Number: Required for verification and communication throughout the application process.

By assembling these documents, you ensure a smooth and efficient application for your Digital Signature Certificate, paving the way for your OPC registration.