Your Solo Venture, Structured for Success: Incorporate a One Person Company with Account Assure
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For ambitious individuals who wish to operate their business with limited liability and perpetual succession, but without the complexities of a larger corporate structure, the One Person Company (OPC) offers a unique and advantageous framework. Introduced to empower solo entrepreneurs, an OPC provides the best of both worlds: the simplicity of a proprietorship combined with the legal benefits of a company.
At Account Assure, as a trusted Financial Audit Firm, we understand the nuances of business structures and the importance of a compliant and efficient setup. We are dedicated to helping individual entrepreneurs establish their OPC seamlessly, providing expert guidance every step of the way.
One Person Company
As the name suggests, an OPC is a company established by a single person. A single individual establishes and manages the company. An OPC has all the features of a company, such as perpetual succession, limited liability and a separate legal entity.
Advantages Of OPC
Legal status
The OPC receives a separate legal entity status from the member. The separate legal entity of the OPC gives protection to the single individual who has incorporated it. The liability of the member is limited to his/her shares, and he/she is not personally liable for the loss of the company. Thus, the creditors can sue the OPC and not the member or director.
Easy to obtain funds
Since OPC is a private company, it is easy to go for fundraising through venture capitals, angel investors, incubators etc. The Banks and the Financial Institutions prefer to grant loans to a company rather than a proprietorship firm. Thus, it becomes easy to obtain funds.
Less compliances
The Companies Act, 2013 provides certain exemptions to the OPC with relation to compliances. The OPC need not prepare the cash flow statement. The company secretary need not sign the books of accounts and annual returns and be signed only by the director.
Easy incorporation
It is easy to incorporate OPC as only one member and one nominee is required for its incorporation. The member can be the director also. The minimum authorised capital for incorporating OPC is Rs.1 lakh but there is no minimum paid-up capital requirement. Thus, it is easy to incorporate as compared to the other forms of company.
Easy to manage
Since a single person can establish and run the OPC, it becomes easy to manage its affairs. It is easy to make decisions, and the decision-making process is quick. The ordinary and special resolutions can be passed by the member easily by entering them into the minute book and signed by the sole member. Thus, running and managing the company is easy as there won’t be any conflict or delay within the company.
Perpetual succession
The OPC has the feature of perpetual succession even when there is only one member. While incorporating the OPC, the single-member needs to appoint a nominee. Upon the member’s death, the nominee will run the company in the member’s place.
One Person Company (OPC) Registration Process
Apply for DSC
The first step is to obtain the Digital Signature Certificate (DSC) of the proposed director which requires the following documents:
- Address proof
- Aadhaar card
- PAN card
- Photo
- Email Id
- Phone number
Apply for DIN
Once the Digital Signature Certificate (DSC) is made, the next step is to apply for the Director Identification Number (DIN) of the proposed director in SPICe+ form along with the name and the address proof of the director. Form DIR-3 is the option only available for existing companies. It means with effect from January 2018, the applicant need not file Form DIR-3 separately. Now DIN can be applied within the SPICe+ form for up to three directors.
Name Approval Application
The next step while incorporating an OPC is to decide on the name of the Company. The name of the Company will be in the form of “ABC (OPC) Private Limited”.
The name can be approved in the Form SPICe+ application. Only one preferred name along with the significance of keeping that name can be given in the Form SPICe+ application. If the name gets rejected, another name can be submitted by applying another Form SPICe+ application.
Once the name is approved by the MCA we move on to the next step.
Documents Required
We have to prepare the following documents which are required to be submitted to the ROC:
- The Memorandum of Association (MoA) which are the objects to be followed by the Company or stating the business for which the company is going to be incorporated.
- The Articles of the Association (AoA) lays down the by-laws on which the company will operate.
- Since there are only 1 Director and a member, a nominee on behalf of such a person has to be appointed because in case he becomes incapacitated or dies and cannot perform his duties the nominee will perform on behalf of the director and take his place. His consent in Form INC – 3 will be taken along with his PAN card and Aadhar Card.
- Proof of the Registered office of the proposed Company along with the proof of ownership and a NOC from the owner.
- Declaration and Consent of the proposed Director of Form INC -9 and DIR – 2 respectively.
- A declaration by the professional certifying that all compliances have been made.
Filing of Forms With MCA
All these documents will be attached to the SPICe+ Form, SPICe-MOA and SPICe-AOA along with the DSC of the Director and the professional, and will be uploaded to the MCA site for approval. The Pan Number and TAN is generated automatically at the time of incorporation of the Company. There is no need to file separate applications for obtaining PAN Number and TAN.
Issue of the Certificate of Incorporation
On verification, the Registrar of Companies (ROC) will issue a Certificate of Incorporation and we can commence our business.
Checklist For Registering OPC
- Minimum and Maximum of one member.
- A nominee should be appointed before incorporation.
- Consent of the nominee should be obtained in Form INC-3.
- The name of the OPC must be selected as per the provisions of the Companies (Incorporation Rules) 2014.
- Minimum authorised capital of Rs.1 lakh.
- DSC of the proposed director.
- Proof of registered office of the OPC.
Why Choose Account Assure for Your OPC Incorporation?
As a reputable Financial Audit Firm, Account Assure brings precision and clarity to your entrepreneurial journey:
- Expert Guidance: Our team possesses in-depth knowledge of company law and regulatory requirements specific to OPCs.
- Compliance Guaranteed: We ensure that your OPC is incorporated in full compliance with the Companies Act, 2013, minimizing future legal issues.
- Streamlined Process: We manage all the formalities, allowing you to focus on building your business.
- Timely Execution: We are committed to completing the incorporation process efficiently and without unnecessary delays.
- Holistic Support: Beyond incorporation, we can advise on financial planning, taxation, and ongoing compliance for your OPC.
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