File your ITR Hassle-Free and Maximise your Refunds
Trusted by 1 Million+ Users
4.8 Star User Rating
Authorized by Tax Department
The concept of a one-person company is introduced in the Companies Act 2013. Since then, it has gained significant traction in recent years. An OPC is basically a Private Company with a unique feature: it has just one shareholder. It is a more legalized and credible form of sole proprietorship. This form of company combines the advantages of a Private Limited Company while allowing for sole ownership.
A One Person Company (OPC) is essentially a Private Limited Company, distinguished by the fact that it has just one shareholder. This legal structure combines the advantages of a Private Limited Company while allowing for sole ownership, making it a more formalized and reputable alternative to a sole proprietorship. It encompasses all the characteristics of a Private Limited Company but necessitates the presence of only a single shareholder.
Limited Liability: One of the key advantages of an OPC (One-Person Company) lies in its ability to secure the personal assets of its owner through limited liability protection. This means that, in the event of financial difficulties within the company, the director's personal assets remain protected and cannot be seized by banks or governmental departments.
Credibility: An OPC, being structured as a private limited company, utilizes a higher level of credibility compared to traditional proprietorship firms. Unlike sole proprietorships, an OPC receives a certificate of incorporation, affirming its legal status as a one-person company.
Continuity of Existence: Unlike proprietorships, which may cease to exist in the event of mishaps involving the proprietor, an OPC maintains its existence and continuity. This continuity is assured as the company can be transferred to a nominee director in the case of unforeseen circumstances.
Separate Legal Entity: An OPC is recognized as a distinct legal entity in its own right. Consequently, business owners are protected from personal liability. The company possesses the autonomy to acquire assets and incur debts under its own name.
Incorporation by NRIs: It is noteworthy that, in accordance with the Union Budget 2021-22 amendments, non-resident Indians (NRIs) have the ability to establish one-person companies. Specifically, individuals who have resided in India for a minimum of 1220 days immediately preceding the financial year can initiate the registration process for an OPC.
Confirm Eligibility and Prepare Documentation:
Before proceeding with company incorporation, ensure that you meet the eligibility criteria and gather all necessary documentation.
Obtain Digital Signature Certificates (DSCs) and Director Identification Numbers (DINs):
Acquire DSCs and DINs for each director involved in the company to facilitate digital authentication and compliance.
Submit Name Reservation Request via Form Spice+:
Initiate the name reservation process by submitting Form Spice+ to the relevant authorities, ensuring your chosen company name complies with legal requirements.
Apply for TAN and PAN for Your New Business:
Apply for PAN and TAN to fulfill taxation obligations for your newly formed company.
Receipt of Incorporation Certificate, PAN, and TAN:
The Registrar of Companies (RoC) will issue an incorporation certificate, along with PAN and TAN details, once your company is officially registered.
Open a Bank Account and Commence Business Operations:
Set up a dedicated bank account for your company and commence your business operations, now equipped with the necessary legal approvals and financial credentials.
To establish your business as a one-person company, you must provide verifiable proof of identity and address to the Registrar of Companies. The following documents need to be submitted:
Ensure all these documents are accurate and up-to-date before submission to complete the incorporation process for your one-person company.
One Person Company Registration fees in India commence at INR 5,599, with an estimated processing time of 7 to 10 working days. This comprehensive expense contains both government charges and fees for professional services. Government fees initiate at approximately INR 900, and they vary in accordance with the OPC's authorized capital. The professional service charges may fluctuate, typically falling within the range of ₹ 5,000 to ₹ 15,000, contingent upon the different service provider.
A one-person company (OPC) can be formed with an authorized capital of Rs. 1 lakh or more, but there is no compulsion to have a minimum paid-up capital.
A one-person company (OPC) is a good option for small businesses that do not expect to have a turnover of more than Rs. 2 Crores or a capital of more than Rs. 50 Lac. An OPC can also have multiple directors.
GST registration is required for One Person Company (OPC) businesses that have an annual turnover of more than Rs. 20 Lakhs for services or more than Rs. 40 Lakhs for goods. OPC businesses that sell goods or services below these thresholds do not need to register for GST.
A one-person company (OPC) is a type of private limited company that can benefit from the Startup India scheme offered by the government. However, the main drawback of this business model is that it cannot get funding from venture capitalists or angel investors by selling its shares or stake.
