The theory of the OPC is shaped under law to provide the support to every small businessman or entrepreneur who dreams of having his own business without sharing the holding or control of the company and enjoys the privileges linked with a Company.
One Person Company and its incorporation are in the early stage to grow as a full-fledged organisation structure in India. The lack of awareness degrades the benefits offered through such organisation structure. Companies Act, 2013 has introduced the said organisation structure for the first time after its gist in latest amendments of Companies Act, 1956.
Most likely, the stakeholders consider a One Person Company different from the Private Limited Company. However, the Act describes it only as the part or the type of Private Limited Companies. The fundamental characteristics of both Private Company and an OPC are identical mutatis mutandis supporting the core organisational structure. The one person company registration procedure in India is also similar to that of Private Limited Company in India. The article apart from laying the procedure of OPC registration online also enlightens on the latest procedural changes in the given procedures.
What is One Person Company?
The organisation structure combined with the advantages seeks advancements of business personnel through exposure into the Corporate World. Holding the legal nature of the Private Limited Company, the advantages of One Person Company can be counted as limited liability, separation of management and perpetual succession. Added advantage is 100% ownership of the shareholder that does not derogate the control over the operations and management of the company.
As per the Companies Act, 2013 imposes a limitation on turnover and capital introduced in an OPC. When the capital or turnover exceeds Rs. 50 lakhs or Rs 2 Crore, respectively during the applicable period, then a company ceases to enjoy the status of an OPC and the same shall be converted into Private Limited Company.
Who can be owner?
An individual, who is born and is a resident of India or has lived in India for at least 182 days can hold the membership of the One Person Company in India.
Who can be director?
An individual qualified under Indian Companies Act, 2013 to be a director, holding the valid Director Identification Number (DIN) can be a Director of the One Person Company. Unlike common perception and practise in case of Private Limited Company, a person other than shareholder can also hold the directorship in the company. Minimum 1 director must be appointed for OPC Registration in India.
Who can be nominee?
In order to retain the character of uninterrupted Existence, the Act prescribes the appointment of a nominee, who shall hold the ownership of the company in event of death or incapacity to contract of existing member. A nominee shall be individual only and is to be appointed while OPC registration in India. The nominee appointed for One Person Company registration can also be changed at any time after the incorporation.
OPC Registration Procedure:
OPC can be incorporated for any business object but not in charitable objects or non-banking financial activities. The OPC registration in India is made eASIER by the Government by implementation of Companies (Amendment) Act, 2017 and other changes being implemented since26th January, 2018. It takes only 3 steps for online One Person Company registration in India in span of 10 to 12 working days.
Acquisition of Digital Signature Certificate:
A Digital Signature Certificate, commonly known as DSC is a form of signature in a token form that is used for submission of e-Forms on MCA portal. DSC would be required for both, subscriber to MoA (shareholder) and the proposed Director of the One Person Company.
Reservation of Unique Name:
Reservation of Name for the companies is simplified through deployment of web-form RUN (Reserve Unique Name). The application can be filed with only one name for it reservation. The web-form is designed in a manner that it only procures the information that is absolutely necessary for the reservation of the name. The name should be applied keeping the provisions in of the Act in mind. The name reserved by the application will be reserved for a period of only 20 days.
Application of Incorporation & procurement of DIN:
By the structural changes in the opc registration procedure, the Ministry has integrated nearly five processes in one form. This includes the application for allotment of DIN, reservation of name (if not applied for), incorporation of company and allotment of PAN and TAN. The said application will be made in SPICe (Simplified Proforma for Incorporating Company Electronically) with the documents to be accompanied. The application shall be filed within 20 days from the date of reservation of name. Drafting of documents shall be preceded to filing the integrated application under SPICe.
Memorandum of Association (MOA) and Articles of Association (AOA) are two most important documents for any company. MOA of company states the scope of main objects along with ancillary object of the company, whereas AOA states the rules and norms on how the company should carry the operations as laid down under the Act.
When the application for OPC registration under SPICe form is also to be made with respect to allotment of DIN, appropriate documents of the proposed directors and information are also required.
Once the MCA verifies the online application for OPC registration, the concerned RoC may grant the Certificate of Incorporation (COI), which is a conclusive proof of existence of the company.
As soon as the Registrar issues the Certificate of Incorporation containing the Date of Incorporation, CIN & Permanent Account Number of the company upon the registration of company, the promoter can commence the business activities in the name of company after opening the company’s account in the bank.