The formation of one-person company (OPC) was mere a dream a few years ago. The Companies Act of 2013 made it possible in India. If you compare it with a private or public limited company, it does not require two directors or members, or groups.
Section 262 of this Act of 2013 officially allows the registration of this company. Simply put, anyone can get the certificate of incorporation of an OPC.
The foremost concern is documentation. It is the only way to make it legally set up. Let’s check out what documents you should enclose with the application for the OPC registration in India.
Having a current bank account is a must-have because it helps in managing and accessing bank statements online. You have to have it for recording all transactions and keeping the summary statements safe for further use.
These all bills represent utility bills. These can be associated with electricity, gas, water, sewage, and rubbish disposal. These all bills are easily available to a layman. So, these are considered concrete proof. In addition, you can attach the bill for your internet, cable TV, or phone services. The cost of these utilities may vary from place to place, which largely depends on the region, its climatic conditions, and the use of these utilities. Therefore, collect and submit these documents for this incorporation.
Possibly, you should have a rental agreement in English. If it’s not there, transcribe it and create its soft version. However, the landlord delivers it in a hard copy. You may scan and convert it into a digital document.
This is also provided by a landlord. It helps the company to have a registered address for incorporation. Section 12 of the Companies Act of 2013 makes it compulsory to attach it if you apply for a certificate of incorporation in India. For this, the Spice+ form should be there. Later, the company may change its address. It must also be notified through Form INC-22, which is a notification of the new registered address of the company. It is then submitted to the ROC.
This is a legal paper that represents the purchase or transfer of property ownership. It’s required when the company buys a property. You should have its digital copy in the English language, which is sometimes called the conveyance deed or the final deed.
How to register an OPC?
Now that you know which documents you should have, let’s move to discovering the steps for registering the OPC that you need to follow in India.
You may hire a consultant. CAAQ can assist or guide you in this matter. You may meet these requirements with us also.
Step 1. Discover the eligibility criteria and documentation requirements.
Step 2. The director’s DIN and digital signature are required. So, be ready with them.
Step 3. Place a request for the company’s name through the Spice+ form.
Step 4. Apply for PAN and TAN for new business registration.
Step 5. Once applied, the ROC or the Registrars of Company issues the incorporation certificate with PAN and TAN.
Step 6: Finally, you need a bank account for making transactions.
This whole process can be 10 to 20 days long. You may experience seamless and effortless applications with CAAQ because we’re experienced in this matter. Our support can help you to come across delays.
This company registration comes up with some more hurdles, which are given below:
a. Nominee Can Be Successor
This company formation requires a nominee, which ensures that the business would continue even if a member of the company is no more. Simply put, the nominee would keep it up and running.
b. Limited Liability
Upon its incorporation, it becomes a separate legal entity. Being so, it provides greater protection to its members. Its members are free from sharing any loss in the company. Even in the case of bankruptcy, the director or member of the company cannot be sued. Nor do they procure the company’s debt.
c. Sole Directorship and Shareholder
This company has a single member who acts as a director. He/she manages the entire business. So, it does not need any executive director for daily activities. The very same member is also its shareholder.
d. Ownership in Property
Being an independent legal entity, the director can own property or other assets for the business. These assets can be machinery factories, residential property, buildings, and other ones. No other person can claim for them.
Benefits of Registering an OPC
This entity is legally set up. So, the law protects its identity. Fortunately, the member or director bears no liability, except for the value of shares that are named to him/her. He/she does not suffer any loss. Nor can he be sued by creditors.
This type of company can easily arrange capital via options like venture capital, angel investors, incubators, and other sources. Simply put, raising money is like a walkover for it.
The Companies Act of 2013 allows exceptions from compliance requirements. It’s free from showing any cash flow statement, maintaining account books, or sharing any annual report.
Setting it up is no more a legal battle. A member is also its director, who is the only authority to approve integration. Besides, it does not require any minimum paid-up capital.
The whole administration of the company is in the single hand of the director. He can make decisions and execute them in no time. Even, ordinary or special resolutions can be put into the minute's book. Just one member is enough to attest to it. Moreover, managing this entity is like a cakewalk.