Step-by-Step Guide to One Person Company Registration

Starting a business can be an exciting journey, and for solo entrepreneurs in India, the One Person Company (OPC) model offers a perfect combination of control and compliance. Introduced under the Companies Act, 2013, OPC enables a single individual to operate a corporate entity with limited liability and distinct legal status. This guide walks you through each step of registering an OPC in India, ensuring you meet all the legal requirements smoothly and efficiently.

What is a One Person Company (OPC)?

A One Person Company is a private limited company that requires only one person to act as the director and shareholder. It enjoys a separate legal identity, offering the promoter limited liability protection. Unlike a sole proprietorship, an OPC is considered a corporate body and offers greater credibility and scalability.

Step-by-Step Process for OPC Registration

Step 1: Obtain a Digital Signature Certificate (DSC)

The registration process starts with getting a Digital Signature Certificate for the proposed director. Since the application process is digital, a DSC is needed to sign and submit online forms on the MCA (Ministry of Corporate Affairs) portal.

Documents required for DSC:

Passport-sized photograph
PAN card
Aadhaar card or other address proof
Email ID and mobile number

Step 2: Apply for Director Identification Number (DIN)

The Director Identification Number (DIN) is a unique identification number for the company’s director. It can be obtained while filing the SPICe+ form or separately by submitting Form DIR-3.

Documents required for DIN:

Identity proof (PAN card)
Address proof (Aadhaar, voter ID, etc.)
Passport-size photo

Step 3: Choose and Reserve a Company Name

Choosing a unique and suitable name for your OPC is crucial. The name should not be identical or similar to an existing company or trademark. You can apply for name reservation using the RUN (Reserve Unique Name) service provided by MCA.

Tips for name selection:

Ensure the name is unique
Avoid restricted or prohibited words
Include "OPC Private Limited" at the end

Once approved, the name is reserved for 20 days, within which the company must be incorporated.

Step 4: Draft the MOA and AOA

The Memorandum of Association (MOA) and Articles of Association (AOA) are crucial legal documents for incorporation:

MOA outlines the company’s objectives and scope of activities.
AOA contains rules and regulations for the company’s internal management.

Both documents should mention the name of the nominee, who will take over if the sole owner becomes incapable of managing the company.

Step 5: File the SPICe+ Form (INC-32)

The SPICe+ form is a simplified integrated form introduced by the MCA. It allows for:

Name reservation
DIN allotment
Company incorporation
PAN & TAN allotment
EPFO, ESIC, GST registration (if applicable)

Documents required for SPICe+ submission:

Passport-size photo
Identity proof and address proof of director and nominee
Registered office address proof
MOA and AOA
Consent from nominee (Form INC-3)
Declaration by professional (CA/CS/CMA)

Step 6: Upload e-Forms and Pay the Fee

After completing and digitally signing the forms, upload them on the MCA portal. The registration fee varies depending on the authorized capital and stamp duty (which differs from state to state).

Step 7: Certificate of Incorporation (COI)

Once your application is verified and approved, the Registrar of Companies (RoC) issues the Certificate of Incorporation. The COI confirms the legal existence of the company and contains the Corporate Identity Number (CIN), PAN, and TAN.

Post-Registration Requirements

After incorporation, several post-registration steps must be followed to ensure full compliance:

1. Open a Current Bank Account

Use the COI, PAN, and other KYC documents to open a current account in the company’s name.

2. File INC-20A (Commencement of Business)

Within 180 days of incorporation, file Form INC-20A with a proof of deposit of paid-up capital in the bank account. This is mandatory before starting any business operations.

3. Maintain Books of Accounts

Keep proper records of all financial transactions as per accounting standards.

4. Appoint an Auditor

It is mandatory to appoint a statutory auditor within 30 days of incorporation.

5. File Annual Returns

File Form AOC-4 and MGT-7 annually with the Registrar of Companies (RoC).

6. Income Tax Filings

Submit annual income tax returns and pay applicable taxes.

Eligibility for Forming an OPC

To form an OPC in India, the following eligibility criteria must be met:

The director must be a natural person, Indian citizen, and resident of India.
Only one OPC can be registered per person.
The nominee must also be a natural person, Indian citizen, and resident of India.
OPCs cannot be formed for non-banking financial or investment activities.

Advantages of OPC Registration

Limited Liability: The director’s personal assets are protected.
Separate Legal Entity: The business is a distinct entity from the owner.
Full Control: A single promoter manages the company without external interference.
Easy Funding: OPCs can raise funds through venture capital, angel investors, or banks.
Brand Credibility: Being registered as a company adds professionalism and trust.

Limitations of an OPC

OPCs cannot have more than one member.
Mandatory conversion into a private limited company if turnover exceeds Rs. 2 crore or paid-up capital exceeds Rs. 50 lakhs.
OPCs cannot carry out NBFC activities.

Estimated Cost of Registration

The cost of registering an OPC generally includes:

Government fees
DSC and DIN charges
Professional fees for drafting and filing

Estimated total cost: INR 7,000 to INR 15,000 (can vary based on state and services involved)

Conclusion

The OPC model is a practical and scalable business structure for solo entrepreneurs who wish to operate with limited liability and corporate status. By following the step-by-step registration process carefully and ensuring post-incorporation compliance, you can set a strong foundation for your business. If you want to save time and avoid errors, seeking help from professional consultants like Agile Regulatory can streamline the process and provide peace of mind.