Overview of OPC Registration

Following are the benefits of choosing to incorporate an LLP in India:

Legal Protection:

The One Person Company (OPC) has its own legal identity separate from its member. This protects the individual who started the company. The member's liability is limited to their shares and they are not responsible in personal capacity for the company's losses. This means that creditors can only take legal action against the OPC and not the member or director.

Easy Fundraising:

An OPC can more easily receive money from sources like venture capitalists, angel investors and incubators because it is seen as a private corporation. A business is more likely to receive a loan from a bank or financial institution than is a sole proprietorship. This makes acquiring funding for an OPC simpler.

Reduced Compliance Requirements:

The Companies Act, 2013 provides certain exemptions and reduced compliance requirements for OPCs. For example, the OPC is not required to prepare a cash flow statement and the company secretary does not need to sign the accounts books and annual returns. These tasks can be handled by the director alone.

Simple Incorporation:

Incorporating an OPC is easy as it only requires one member and one nominee. The member can also act as the director. While there is a minimum authorised capital requirement of Rs. 1 lakh, there is no minimum paid-up capital requirement. This makes the incorporation process simpler compared to other types of companies.

Ease of Management:

Since a single person can establish and manage the OPC, it is easier to handle its affairs. Decision-making is quicker and resolutions can be passed easily by the member.

Fewer Compliance Requirements:

The compliance requirements for OPCs are significantly less compared to other types of companies. This makes the registration process easier with minimal paperwork.

Benefits for Small Scale Industries:

OPCs can avail the benefits offered to small-scale industries. These benefits include easy funding without collateral security up to certain limits, lower interest rate loans and privileges under the foreign trade policy. These advantages contribute to the progress and development of the OPC in its early stages.

Perpetual Succession:

Even though just one member comprises an OPC, it enjoys the feature of perpetual succession. The member needs to appoint a nominee during incorporation. When the member dies, the nominee will take over and run the company.

What are the Eligibility Criteria for Registering One Person Company in India?

The following are the essentials to incorporate an OPC in India:

• One person who is an Indian citizen as well as resident is sufficient to form an OPC. It must be noted that to qualify as a resident, a person must have spent at least 182 days in India during the previous fiscal year.
• Business models like a Company or LLP cannot become a part of a One Person Company.
• The person establishing the OPC must choose a nominee during the incorporation process.
• The minimum authorised capital for an OPC must be at least Rs 1 Lakh.
• An OPC cannot have a minor as its member.
• There must be at least one nominee and one director in an OPC.

Following documents are essential to register an OPC:

• A scanned copy of current bank statement.
• Scanned copies of an electricity bill, gas bill and phone bill.
• A digital copy of a rental agreement written in English. Rental agreements are usually provided as hard copies to tenants. They need to be scanned and submitted for documentation.
• A digital copy of a no-objection certificate from the property owner.
• If the property is owned, a scanned copy of the property or sale deed is also required.

What is the Cost of Registration for One Person Company?

The registration charges for an OPC depend on several factors, with the quantity of money allocated as the company's share capital as the primary factor.

The government levies a fixed fee of Rs. 2,000 in cases where the nominal share capital is less than Rs. 10 lakhs. There is an additional cost of Rs. 200 for every extra Rs. 10,000 in share capital up to Rs. 50 lakhs. To encourage entrepreneurship, the government has waived off the incorporation fee.

The registration fee includes obtaining the DIN (Director Identification Number) and DSC (Digital Signature Certificate) for the directors of the company, as well as stamp duties that vary depending on the state where the OPC is being registered. It also includes filing various forms and documents.

No matter what form of company you are registering for, whether it is an OPC or another kind, it is always advisable to get the advice of professionals. Consequently, a professional fee will be charged for their services. This is a means to make an investment to guarantee the OPC's legal and efficient registration. The professional fee depends on the complexity of the task and other factors.

StartupFino, with its team of trained professionals, assists you not only through the registration process but also in post registration compliances as well.

Following are the steps to register a OPC in India:

Step 1: Get a Digital Signature Certificate (DSC).

Step 2: Apply for Director Identification Number (DIN).

Step 3: Decide on a name and request Ministry of Corporate Affairs (MCA) permission.

Step 4: Write and sign the articles of association (AOA) and memorandum of association (MOA).

Step 5: Compile all required documentation and submit it, in addition to the registration cost and stamp duty.

Step 6: Fill out and submit the application forms to the MCA for review and approval.

Step 7: Receive the certificate of establishment or incorporation.

The Companies Act of 2013 has certain rules that need to be followed by companies within specific deadlines. The Registrar of Companies, shareholders, directors, investors and tax agencies are just a few of the stakeholders who are protected by these standards, which promote openness, good governance and accountability. These regulations can be broken down into four main groups: annual compliances, frequent compliances, compliances based on events and one-time compliances following incorporation.

The basic mandatory compliances include:

• Holding a minimum of one board meeting in each quarter of the year, with a minimum of 90 days separating the two meetings.
• Keeping proper books of accounts.
• Running statutory audit of the financial statements.
• Filing business income tax returns every year before September 30th.
• Filing Financial Statements using Form AOC-4 and Annual Return using the proposed Form MGT 7-A.

What are the Rules on Taxation applicable to an OPC?

The taxation rules that apply to a one person company (OPC) are as follows:

• The OPC must file Income Tax Returns as required.
• TDS (Tax Deducted at Source) needs to be filed for each quarter, mentioning the TAN (Tax Deduction and Collection Account Number).
• An ESI (Employee State Insurance) registration must be obtained if the OPC employs more than ten individuals.
• An OPC's income is taxed at 30% of its entire income for the financial year, following the tax rate slab.

One Person Companies have gained much popularity since they were introduced in 2008. While forming an OPC, certain requirements and compliances must be adhered to in order to make the incorporation and subsequent functioning effective.

StartupFino is a company that specialises in offering complete services for OPCs. We can help you with everything from providing advice in the initial phase to ensuring that you meet all the necessary requirements, while also keeping your OPC in good legal standing.

Our services include the following:

• OPC name reservation services.
• Drafting OPC agreements in compliance with applicable laws.
• Annual accounts and return filing services with the Registrar of Companies.
• OPC taxation and accounting services.
• Arrangement and reconstruction of OPC firms.

In addition to fulfilling the formalities mentioned above, StartupFino also offers pre-establishment and post-establishment one person company services.

By using our OPC services, entrepreneurs can avoid the negative outcomes that come from not following the rules. We work hard to provide services that are prompt and effective, so you can manage your business without any issues and without facing penalties or problems.