One Person Company (OPC) is a type of business entity in India that allows a sole proprietor to incorporate their business and enjoy the benefits of a private limited company. This type of company is ideal for small businesses, entrepreneurs, and sole proprietors who want to run their business with limited liability protection and without the need for multiple shareholders or directors. In this article, we will discuss the eligibility criteria for a One Person Company registration in India.
The Companies Act, 2013, lays down the eligibility criteria for registering a One Person Company in India. The following are the key requirements that must be met to register an OPC:
- Indian Nationality: The promoter of an OPC must be an Indian citizen and a resident of India. A resident of India is defined as a person who has stayed in India for a period of not less than 182 days in the immediately preceding financial year.
- Age limit: The promoter of an OPC must be at least 18 years old.
- Limit on number of OPCs: A person can only be a member in one OPC as a sole shareholder.
- Nominee Director: The OPC must appoint a nominee director who will take control of the company in the event of the demise or incapacity of the sole shareholder.
The following documents are required for registering a One Person Company:
- PAN Card of the Promoter
- Address Proof of the Promoter
- ID Proof of the Promoter
- Digital Signature of the Promoter
- Memorandum of Association and Articles of Association
- Proof of registered office address
Process of registration
The process of registering a One Person Company in India is as follows:
- Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN) of the promoter and nominee director.
- Apply for the availability of the name of the company with the Registrar of Companies (ROC).
- Prepare the memorandum of association and articles of association of the company and file them along with the incorporation form with the ROC.
- Once the ROC is satisfied with the documents filed, it will issue the certificate of incorporation.
- Obtain PAN and TAN for the company and open a bank account in the name of the company.
- File the Incorporation Form, along with the requisite documents with the Registrar of Companies (ROC).
Benefits of registering a One Person Company
- Limited Liability Protection: One of the key benefits of registering an OPC is that it offers the sole proprietor limited liability protection. This means that the personal assets of the sole proprietor are protected from the company’s creditors in the event of bankruptcy or liquidation.
- Easy to set up and maintain: Unlike other types of business entities, OPCs are relatively easy to set up and maintain. There are minimal compliance requirements, and the sole proprietor has complete control over the company.
- Separate Legal Entity: OPC is treated as a separate legal entity, which means that it can enter into contracts, sue or be sued in its own name, and own property in its own name.
- Flexibility: OPCs are flexible and can be converted into any other form of business entity at a later stage.
- Tax Benefits: OPCs are eligible for various tax benefits, such as exemptions from tax audit, presumptive taxation scheme, and reduced corporate tax rates.