One Person Company

In the evolving landscape of entrepreneurship, the need for flexible and accessible business structures has become increasingly important. One such innovative structure is the One Person Company (OPC), which empowers individual entrepreneurs to establish a formal business entity while enjoying the benefits of limited liability protection. Introduced under the Companies Act of 2013 in India, OPCs address the challenges faced by solo entrepreneurs, providing a simpler framework for compliance and operation.

What is a One Person Company?

A One Person Company (OPC) is a distinct type of business entity that allows a single individual to own and manage a company with limited liability. This structure is designed for entrepreneurs who wish to operate independently while protecting their personal assets from business liabilities. As a relatively recent addition to the Indian corporate framework, OPCs have become a popular choice for startups and small businesses, enabling individuals to formalize their ventures with minimal barriers.

Before the advent of OPCs, sole proprietors faced significant challenges in formalizing their businesses. The traditional sole proprietorship model provided no legal distinction between the business and the owner, meaning that personal assets were fully at risk in the event of financial losses or legal disputes. Furthermore, the absence of a recognized structure for single-member companies limited access to funding and made it difficult for individual entrepreneurs to build credibility in the marketplace.

With the existing options being either a partnership or a private limited company, many solo entrepreneurs found it challenging to manage compliance requirements and operational complexities. The introduction of the OPC framework aimed to bridge this gap, allowing individuals to enjoy the benefits of a corporate structure while minimizing the burdens of compliance and liability.

What are the documents required for registration of One Person Company?

Identity Proof of the Sole Member: Any one of the following documents: Aadhar Card, Passport, Voter ID or Driving License.

Address Proof of the Sole Member

1. Any one of the following (not older than 2 months): Utility Bill (Electricity, Water, etc.) or Bank Statement or Lease Agreement or Rent Agreement.

Digital Signature Certificate (DSC)

1. Obtained for the sole member/director for signing electronic documents.

Nominee’s Consent (Form INC-3)

1. Form INC-3 serves to provide consent from the nominee appointed by the sole member, confirming their willingness to assume control in case of the member’s demise or incapacity.

Memorandum of Association (MOA)

1. A document outlining the objectives and purpose of the company, which must be signed by the sole member.

Articles of Association (AOA)

1. A document detailing the internal rules and regulations governing the company, which must also be signed by the sole member.

Registered Office Address Proof

Proof of the registered office address, which can include

1. Rental Agreement
2. Utility Bill in the name of the owner or a No Objection Certificate (NOC) from the landlord if the office is rented.

Affidavit and Declaration

1. An affidavit from the sole member declaring compliance with the provisions of the Companies Act, stating that the documents submitted are true and correct.

Declaration by Subscribers and First Directors (Form INC-9)

1. A declaration confirming that the details provided are accurate and that the subscribers and first directors meet the eligibility criteria under the Companies Act.

Consent to Act as Director (Form DIR-2)

1. A consent form signed by the proposed director, indicating their willingness to act as a director of the company.

What is the process of Registration for One Person Company (OPC)?

Step1. Obtain Digital Signature Certificate (DSC): The DSC is necessary for signing electronic documents and forms during the company incorporation process.

For more information about DSC, Click Here!

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Step2. Obtain Director Identification Number (DIN): The DIN can be applied directly through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form during the incorporation process. It is mandatory for the proposed director.

Step3. Name Reservation via SPICe+ Form: Apply for name reservation directly via the SPICe+ form on the Ministry of Corporate Affairs (MCA) portal. This ensures the company name is unique and complies with the naming guidelines provided by the MCA.

Step4. Prepare Memorandum and Articles of Association (MOA and AOA): MOA and AOA can be filed as part of the SPICe+ Form. They are essential to define the company's purpose, objectives, and internal management rules.

Step5. File Incorporation Application: Use SPICe+ Part B for the incorporation application. It combines multiple services such as applying for DIN, PAN, TAN, and GSTIN, making the incorporation process faster.

Step6. Obtain Certificate of Incorporation: After verification of the SPICe+ form and all attached documents, the Registrar of Companies (ROC) will issue a Certificate of Incorporation. This certificate officially registers the OPC and grants it legal status to operate.

What are the Advantages of OPC?

a. Limited Liability:

The liability of the owner is limited to the extent of their investment.

b. Single Ownership:

Suitable for solo entrepreneurs who want full control over the business.

c. Separate Legal Entity:

OPC is recognized as a separate legal entity, distinct from its owner.

d. Ease of Management:

Simplified management and compliance requirements compared to other structures.

What are the Disadvantages of OPC?

a. Single Ownership:

Limits collaboration and shared decision-making.

b. Limited Capital:

Raising capital may be challenging compared to larger corporate structures.

c. Conversion Restrictions:

Mandatory conversion to a private limited company if the OPC exceeds specified thresholds.

d. Nominee Requirement:

A nominee must be appointed, which could lead to complications if not managed properly.

How can JKstartup360 assist with obtaining registration for One Person Company?

JKStartup360 offers a seamless and efficient solution for obtaining the Certificate of Incorporation for your One Person Company (OPC). Our team of experts handles the entire registration process, from securing your Digital Signature Certificate (DSC) and Director Identification Number (DIN) to filing the required documents, including the Memorandum and Articles of Association (MOA and AOA), through the SPICe+ form.

We assist with name reservation, ensure compliance with all legal requirements, and submit the necessary declarations and consents like INC-9, DIR-2, and INC-3. With our comprehensive support, you can rest assured that your OPC registration will be completed promptly and without hassle, allowing you to focus on building your business.

Choose JKStartup360 for a reliable, end-to-end service tailored to your business needs.