How to Register a One Person Company(OPC) in India
Updated: Aug 20, 2021
Before understanding the Registration process for an OPC let us quickly go through the various types of companies that can be formed. A company can be established for the lawful purpose by the following number of people
One Person Company in case of an Individual
A Private Limited Company in case of two or more people
When there are seven or more people a Public Limited Company is formed
An OPC has certain restrictions when it comes to incorporation, unlike a Private Limited Company. Hence, before beginning with the OPC registrations it is essential to understand the limits to ensure the promoter is eligible as per the Companies Act to register an OPC.
Legal entities like Company or LLP cannot incorporate an OPC.
During incorporation, a nominee must be appointed by the promoter.
Business involved in financial activities cannot incorporate as an OPC
When the paid-up capital share exceeds Rs.50 lakh and the turnover crosses over Rs.2 crore an OPC must be converted into a Private Limited Company.
A person however cannot incorporate more than one OPC. Also, an OPC is prohibited for having a minor as its member.
What is the role of a Nominee in an OPC?
A nominee in an OPC is the person designated by the sole promoter of the company to be his successor. In case of death or incapacitation, the Nominee will take over. The nominee must be an Indian Citizen and a resident who is not a minor. While incorporating a One Person Company, a Nominee Consent Form must be filed with the MCA
Withdrawal of Consent: The Nominee can withdraw his/her consent, in this case, the sole member is required to nominate another member as a legal heir within 15 days of the notice of the withdrawal. The Nomination of the new personnel must be intimated to the company through a written consent in Form INC 3. In turn, the Company is required to file the notice of withdrawal of consent along with the intimation of the new nominee with the Registrar in Form INC 4.
Change in Nominee: The Sole member of the One Person Company can change the Nominee by providing notice in writing to the company. The new nominee must consent to the nomination form in INC 3. The Company must file the notice of the change and the consent of the nominee with the registrar with the applicable fee, within 30 days of receiving the intimation of change.
Nominee Appointment: In case if the nominee becomes in charge of the company due to cessation of the original member's term owing to the death or incapacity of the latter, the new member must appoint a new nominee as a replacement
Penalty: If a One Person Company or an officer of any such company is not compliant with the mentioned regulations the entity might incur penalties as high as Rs.10,000. Further, for each day of default, the penalty will be increased by a fine of Rs,1000.
How to Incorporate an OPC?
Here, we have simplified the process for Incorporating an OPC into 4 steps
1. The identity proof and address proof will be required for obtaining the DSC.
2. Simultaneously, to obtain the name approval it is necessary to submit an application for name registration to the MCA. The applications are processed by MCA in 24-72 hours. The name suggested should end or include the word OPC.
3. On obtaining the name approval, the incorporation application can be filed with the MCA with a signed MOA and AOA. The identity proof, address proof, and residence proof of the members, as well as the nominee, would be required. In addition to this other incorporation documents like affidavits and declarations of the sole promoter must be submitted. The consent of the Nominee Director must be attached in Form INC 3. The Registrar of Companies (ROC) approves filing for incorporation. In case of discrepancies, the application can be resubmitted.
4. Once the Incorporation Certificate is obtained the OPC would initiate the process for bank account opening. RegisterKaro can help you open a current bank account. Post incorporation the director is required to deposit the paid-up capital he has mentioned in the MOA. After the equity capital is infused in the current bank account, the company can file for a commencement of business certificate with the MCA. The Business commencement certificate must be obtained within 180 days of incorporation to a