Off late, the concept of One Person Company (OPC) has gained significant popularity among entrepreneurs and small business owners in India. OPC is a type of business structure that allows a single person to run a company and enjoy the benefits of limited liability, separate legal entity, and perpetual succession. In this article, we will cover the how and why aspects of one person company registration.

What is One Person Company (OPC)?

One Person Company (OPC) is a type of business structure that was introduced in India under the Companies Act, 2013. OPC is a hybrid form of business entity that combines the features of a sole proprietorship and a private limited company. In other words, an OPC is a company that is owned, managed, and controlled by a single person.

Why To Register One Person Company?

There are several reasons why entrepreneurs and small business owners in India choose to register their business as an OPC. Some of the key reasons include:

Limited Liability: One of the most significant advantages of OPC registration is limited liability. As a sole proprietor, you are personally liable for all the debts and obligations of your business. However, in an OPC, the liability of the owner is limited to the extent of their share capital. This means that your personal assets will not be at risk if the company incurs any losses or faces legal action.

Separate Legal Entity: OPCs are treated as a separate legal entity from the owner, which means that the company can own assets, enter into contracts, and conduct business in its own name. This gives credibility and trustworthiness to the business, which can be useful in attracting investors, customers, and suppliers.

Perpetual Succession: An OPC has a perpetual succession, which means that the company will continue to exist even after the death or resignation of the owner. This ensures continuity of the business and protects the interests of shareholders and other stakeholders.

Lower Compliance Burden: Compared to other forms of companies, OPCs have a lower compliance burden. As there is only one shareholder and director, the company is exempt from many of the regulatory and compliance requirements that apply to private limited companies.

Steps for One Person Company Registration

The process of registering an OPC in India is relatively simple and straightforward. Here are the steps involved:

Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN): The first step in OPC registration is to obtain a digital signature certificate and director identification number for the proposed director of the company.

Choose a Name and Obtain Approval: The next step is to choose a name for your company and obtain approval from the Ministry of Corporate Affairs (MCA).

Drafting of Memorandum and Articles of Association: The third step is to draft the Memorandum and Articles of Association of the company, which outlines the objectives, rules, and regulations of the company.

Filing of Forms and Documents: The next step is to file the necessary forms and documents with the Registrar of Companies (ROC), including the Memorandum and Articles of Association, consent of the director, and declaration by the director.

Payment of Fees and Stamp Duty: Once the forms and documents are filed, you need to pay the necessary fees and stamp duty to complete the registration process.

Benefits of One Person Company Registration

There are several benefits of OPC registration in India, including:

Easier to Raise Funds: OPCs can easily raise funds from investors or banks by issuing equity shares or obtaining loans, which can help in expanding the business.

Tax Benefits: OPCs are eligible for various tax benefits, including lower tax rates, deductions, and exemptions, which can help in reducing the tax liability of the company.

Conclusion:

If you are considering registering your business as an OPC, it is important to understand the process and legalities of One Person registration. So, if you have gone through the article thoroughly and have arrived at the conclusion that One Person Company registration is best fir for your needs, connect with Filings First today.