All About One Person Company (OPC) Formation and Compliance in India

What Is a One-Person Company?

The Companies Act of 2013 brought in a new idea called One Person Company (OPC). It lets individuals start a company with limited liability and succession. Before this act, only two people could start a company. OPC registration in India follows this act, supporting OPCs.Private companies need at least two directors and two members, but OPCs can be formed by one person. Section 262 of the Companies Act of 2013 allows OPC registration in India. OPC registration only requires one director and member for the whole firm. OPCs have fewer compliance requirements compared to private companies.

Features of a One-Person Company (OPC)

Here’s a breakdown of what a One-Person Company (OPC) can do:

Private Company

An OPC is a unique type of private company that a single person can establish for any lawful purpose, as stated in Section 3(1)(c) of the Companies Act.

Single Member

Compared to other private companies that require multiple shareholders, OPCs have only on member or shareholder

Nominee

When setting up an OPC, the sole member needs to choose a nominee. This person would step in if the sole member can’t run the company because of unexpected situations.

No Perpetual Succession

Unlike other companies that keep going even if a member dies, OPCs don’t last forever. If the sole member dies, the nominee decides if they’ll take charge of the company.

Minimum One Director

An OPC must have at least one director, who is usually the sole member. It can have a maximum of 15 directors.

No Minimum Paid-Up Share Capital

The Companies Act, 2013 doesn’t say you need a minimum amount of paid-up share capital for OPCs.

Checklist for registering a One Person Company (OPC)

Here’s a checklist for registering a One Person Company (OPC), along with the required documents:

Ensure Minimum and Maximum Membership:

OPCs have only one member. You need to choose a nominee who will take over if something happens to the member.

Obtain Nominee Consent:

Get the consent of the nominee by using Form INC-3.

Choose a Suitable Name:

Choose a name for the OPC that follows the Companies (Incorporation Rules) 2014.

Digital Signature Certificate (DSC):

Provide the DSC of the proposed director. This ensures secure online filing and authentication.

Registered Office Proof:

Submit proof of the registered office of the OPC, like an electricity bill (not older than 2 months), a notarized rental agreement (for rented property), or a sale deed/property deed (for owned property).

Compliances for One Person Company (OPC)

Here’s a breakdown of the compliances for One Person Company (OPC):

Disclosure of Non-Disqualification by Directors (DIR-8)

Every director of an OPC needs to reveal their non-disqualification status every financial year. This is done by submitting Form DIR-81.

Director’s Interest in Other Entities (MBP-1)

During the first Board of Directors meeting, each director should disclose any involvement they have in other entities. If there are any changes in director interest, later on, a new MBP-1 form needs to be submitted.

Annual Filing of DIR-3

Every director of the OPC must file Form DIR-3 by September 30th each year.

MSME-1 Filing

The OPC is required to file Form MSME-1 half-yearly to report pending payments to MSME vendors. The deadlines for submission vary based on the reporting period. You must submit the form by October 30th for the April to September period, and by April 30th for the October to March period. This form is very important to make sure everything is clear and follows the rules about payments to MSMEs.

DPT-3 Filing

Every year, by June 30th, the OPC needs to send Form DPT-3 to report deposits and details not seen as deposits as of March 31st. This helps keep things clear and follow the rules for the company’s money matters.

Appointment of Auditor (ADT-1)

Within 15 days of the Annual General Meeting, appoint an auditor for a 5-year term by submitting Form ADT-1. This step ensures compliance with regulatory requirements regarding the company’s financial audits.

Annual Return (MGT-7)

The OPC needs to submit its annual return within 180 days from the end of the financial year.

Financial Statements (AOC-4)

Submit the balance sheet, statement of profit and loss account, director’s report, and auditor’s report within 180 days from the end of the financial year.

Other Compliance

Ensure that at least one Board of Directors meeting is held in each half of the calendar year, with a gap of at least 90 days between meetings. Keep mandatory registers updated, including the Director Register, Director Shareholding Register, and Related Party Transaction Register. Prepare a Director’s Report by Rule 8A of Section 134.

Process of Registering One Person Company (OPC)

Registering an LLP in India has a few steps. Let’s break it down

Get a Digital Signature Certificate (DSC)

First, you need to get the Digital Signature Certificate (DSC) of the proposed director. This certificate is important for doing things online and proving who they are. You’ll need some documents

• Address proof
• Aadhaar card
• PAN card
• Photo
• Email ID
• Phone number

Get Director’s Identification Number (DIN)

The sole director needs to apply for a Designated Partner Identification Number (DPIN). This is done by filling out Form 7.

Obtain Name Approval

Afterward, send Form SPICe+ to the Registrar of Companies (ROC) for name approval. Ensure that the proposed name meets the guidelines and is unique.

Incorporate the OPC

Submit the required forms to the Ministry of Corporate Affairs (MCA) for incorporation. The minimum authorized capital for incorporating an OPC is Rs. 1 lakh, but there is no minimum paid-up capital requirement.

Issue of the Certificate of Incorporation

Once you finish all the paperwork, the ROC will issue the Certificate of Incorporation, officially establishing your OPC.

FAQ on One Person Company (OPC)