One Person Company Registration and Compliance: PAN, TAN, and GST Filing Simplified

Introduction:

Have you been considering starting your own business but feel overwhelmed by the challenge of finding trustworthy partners?

Then getting one person company registration could be the perfect solution for you. 

Introduced under the Companies Act, 2013, this innovative business structure enables aspiring entrepreneurs to establish a legally recognized company with the advantage of limited liability protection, all without requiring additional shareholders.

At RegisterKaro, we recognize that the process of One Person Company registration in India can appear complex and intimidating. Therefore, a comprehensive guide has been meticulously designed to simplify each step, covering everything from initial registration requirements to ongoing compliance obligations, including PAN, TAN, and GST filing. 

Whether you are a freelance professional, a consultant, or a small business owner, this article will provide you with essential insights, ensuring that you are well-equipped to make informed decisions throughout your entrepreneurial journey.

What is a One Person Company Registration?

Are you curious about what sets a One Person Company apart from other business structures? A One Person Company represents a unique hybrid that combines the benefits of a sole proprietorship with the advantages of a private limited company. As defined under Section 2(62) of the Companies Act, 2013, an OPC is “a company which has only one person as a member.”

This innovative business structure was introduced to promote entrepreneurship and provide support to small business owners. To achieve this, limited liability protection has been offered without requiring multiple shareholders. 

As a result, the personal assets of the sole member remain safeguarded, since the company is recognized as a separate legal entity. Consequently, entrepreneurs can operate with greater financial security while enjoying the benefits of a corporate framework.

The concept of One Person Company was first recommended by the J.J. Irani Committee in 2005, but it wasn’t until the Companies Act, 2013 came into effect that this business structure became a reality in India. Since then, thousands of entrepreneurs have benefited from this revolutionary business format that combines operational simplicity with legal protection.

Key Benefits of One Person Company Registration

Wondering why you should consider registering an OPC instead of operating as a sole proprietorship? The advantages of One Person Company registration are numerous and significant:

Limited Liability Protection

The most compelling reason to register an OPC is the limited liability protection it offers. Unlike a sole proprietorship, where your assets are at risk, an OPC creates a legal separation between you and your business. This means your assets remain protected in case of business debts or legal issues.

Perpetual Succession

Are you concerned about business continuity? With One Person Company registration, perpetual succession is ensured through the mandatory nomination of another individual. In the event of the member’s death or incapacity, the nominee is legally authorized to take over, thereby guaranteeing uninterrupted operations. As a result, your entrepreneurial legacy remains safeguarded, and the business continues without disruption.

Enhanced Credibility and Trust

By registering as an OPC, business credibility is significantly enhanced in the market. Registered companies are often perceived more favorably by clients, vendors, and financial institutions compared to unregistered businesses. Consequently, greater trust is established, leading to increased business opportunities and improved access to financing options.

Easy Access to Credit

Financial institutions and banks are generally more inclined to extend credit facilities to registered companies. With an OPC registration, access to loans, credit lines, and other financial instruments becomes significantly easier. As a result, business growth is supported through better financial backing and increased funding opportunities.

Tax Benefits

Compared to sole proprietorships, OPCs enjoy specific tax advantages. For instance, corporate tax rates, which are typically lower than personal income tax rates for higher-income individuals, are applied. Therefore, tax liabilities are effectively reduced, allowing for greater financial efficiency and profitability.

Professional Image

Operating as an OPC enables a more professional image to be projected to clients and stakeholders. This enhanced credibility provides a competitive edge over unregistered businesses, making it easier to build trust, establish industry authority, and attract high-value partnerships.

One Person Company Registration Process: Step-by-Step Guide

By following this detailed step-by-step process a smooth and hassle-free registration experience can be ensured and we can assist you in the same.

Step 1: Obtain a Digital Signature Certificate (DSC)

The first requirement in the registration process is the acquisition of a Digital Signature Certificate (DSC) for both the sole member and the nominee. 

This certificate must be obtained from a government-authorized certifying agency. Since all documents submitted to the Ministry of Corporate Affairs (MCA) must be digitally signed, obtaining the DSC is a mandatory prerequisite.

Step 2: Apply for Director Identification Number (DIN)

Next, the Director Identification Number (DIN) must be obtained by the sole member or director. This is now done through the SPICe+ form available on the MCA portal. Previously, a separate application was required, but to streamline the process, it has now been integrated into the SPICe+ system.

Step 3: Choose a Unique Company Name

A unique company name must be selected per the naming guidelines set by the MCA. Additionally, the name must include “One Person Company” or the abbreviation “OPC” in brackets. 

To prevent rejection, thorough research must be conducted to ensure the name is not already in use or in conflict with existing trademarks.

Step 4: Prepare Memorandum of Association (MOA) and Articles of Association (AOA)

The Memorandum of Association (MOA) and Articles of Association (AOA) must be drafted, as these foundational documents define the company’s objectives and internal regulations. Furthermore, compliance with the provisions of the Companies Act, 2013, is essential before submission.

Step 5: File the SPICe+ Form with MCA

Once the required documents have been prepared, the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form must be completed and submitted through the MCA portal. 

Due to the integration of multiple steps into this single form, the overall incorporation process has been significantly simplified.

Step 6: Pay the One Person Company Registration Fees

After submitting the necessary documents, the prescribed government fees for OPC registration must be paid. The fee structure varies based on the company’s authorized capital, so verification of the exact amount before payment is advisable.

Step 7: Obtain the Certificate of Incorporation

Following the payment, the submitted documents undergo verification by the Registrar of Companies (ROC). Once the approval is granted, a Certificate of Incorporation is issued. At this stage, the OPC is officially recognized as a legal entity.

Step 8: Fulfill Post-Incorporation Compliance

Finally, several post-incorporation compliances must be completed. These include obtaining a PAN and TAN, opening a company bank account, and registering for GST if applicable. Ensuring these steps are completed on time will help maintain compliance and facilitate smooth business operations.

By carefully following these steps, OPC registration can be completed, paving the way for a structured and legally compliant business.

Documents Required for One Person Company Registration

Gathering the necessary paperwork is a crucial step in ensuring a smooth and efficient One Person Company registration process. 

By preparing the documents required for one person company registration in advance, potential delays can be avoided, and the entire process can be expedited. Below is a comprehensive list of documents that must be arranged before initiating the registration.

For the Sole Member/Director

To verify the identity and address of the sole member, the following documents must be provided:

• A valid proof of identity, such as an Aadhaar Card, Passport, Voter ID, or Driving License, must be submitted.
  
• A proof of residence, including a recent utility bill (not older than two months), bank statement, or passport, must be furnished.
  
• A recent passport-sized photograph is required for identification purposes.
  
• A PAN Card must be submitted, as it is a mandatory document for company registration.
  
• A Digital Signature Certificate (DSC) must be obtained since all documents will need to be digitally signed before submission.
  

For the Nominee

Since the nominee plays a crucial role in ensuring the continuity of the OPC, the following documents must be provided:

• A written consent letter, in the prescribed format, must be submitted to confirm the nominee’s willingness to take over in case of the member’s incapacity or demise.
  
• Proof of identity and residence (same as those required for the sole member) must be provided.
  
• A recent passport-sized photograph must also be submitted.
  

For the Registered Office

Since the company must have a registered office address, the following documents are required:

• A valid proof of office address, such as a Rental Agreement, Electricity Bill, or Property Tax Receipt, must be submitted.
  
• If the property is rented, a No Objection Certificate (NOC) from the property owner must be provided to confirm permission for business operations at that address.
  

Company-Related Documents

To ensure compliance with legal formalities, the following documents must be prepared and submitted:

• The Memorandum of Association (MOA), which defines the company’s objectives, must be drafted and signed.
  
• The Articles of Association (AOA), which outline the internal rules and regulations of the company, must also be prepared.
  
• A declaration confirming compliance with all requirements of the Companies Act, 2013, must be submitted to validate adherence to legal obligations.
  

By ensuring these One Person Company Registration documents, the process can be completed efficiently and without unnecessary complications.

One Person Company Registration Fees and Cost in India

Are you curious about the financial investment needed for registering a One Person Company? Understanding the various cost components involved will help in planning your budget efficiently. 

The total One Person Company registration cost in India comprises multiple elements, all of which contribute to the overall expense. By breaking down these costs, a clearer picture of the required investment can be obtained.

Government Fees

To complete the legal registration process, government fees must be paid. These include:

• A registration fee of ₹2,000 is applicable for companies with an authorized capital of up to ₹10 lakhs. For higher capital amounts, additional charges are levied.
  
• Stamp duty, which varies across different states, is required to be paid. Generally, the cost falls within the range of ₹1,000 to ₹2,000.

Professional Charges

Since expert guidance is often required for document preparation, filing, and consultation, legal and professional fees must be considered. These typically range between ₹8,000 and ₹15,000, depending on the complexity of the registration process and the service provider chosen.

Additional Costs

Apart from the government fees and professional charges, several other expenses are incurred during the registration process:

• A Digital Signature Certificate (DSC) must be obtained, costing between ₹1,000 and ₹3,000.
  
• A Director Identification Number (DIN) must be acquired at an approximate cost of ₹500.
  
• The application for PAN and TAN requires an additional expense of ₹200 to ₹400.
  
• If GST registration is applicable, it is generally free of charge; however, professional fees may be incurred for assistance in completing the registration process.
  

Total Estimated Cost

After taking all the above components into account, the overall One Person Company registration cost in India typically falls within the range of ₹12,000 to ₹25,000. 

However, this amount may vary depending on factors such as geographical location, the chosen authorized capital, and whether professional assistance is availed.

By carefully considering these cost elements, financial planning for OPC registration can be optimized, ensuring a smooth and hassle-free incorporation process.

Compliance Requirements for One Person Company

Maintaining proper compliance remains crucial for the smooth and lawful operation of a One Person Company (OPC). 

After the successful completion of OPC registration, several legal obligations must be fulfilled to ensure ongoing regulatory adherence. A clear understanding of these requirements will help in avoiding penalties and maintaining the company’s good standing.

Annual Filings

To remain compliant, several filings are required to be submitted annually:

• Annual Return (Form MGT-7) must be filed within 60 days from the conclusion of the financial year. This ensures transparency and adherence to statutory regulations.
  
• Financial Statements (Form AOC-4) are required to be submitted within 180 days from the financial year’s close, allowing regulatory authorities to assess the company’s financial health.
  
• Income Tax Return is to be filed in accordance with the provisions of the Income Tax Act, 1961. This filing ensures that tax obligations are met as per the applicable laws.
  

Board Meeting Requirements

Unlike other corporate structures, OPCs are granted certain exemptions regarding board meetings. However, to maintain compliance:

• At least one board meeting must be conducted in each half of the calendar year, ensuring a minimum gap of 90 days between two meetings.
  
• Documentation of these meetings must be maintained for future reference and legal verification.
  

Registers and Records Maintenance

Proper maintenance of company records is essential to meet compliance standards. The following records must be properly updated:

• A register of members must be maintained as required by law.
  
• Records of all resolutions and meetings must be documented to ensure legal and operational transparency.
  
• Books of accounts must be accurately maintained to reflect all financial transactions and business activities.
  

PAN, TAN, and GST Compliance

To facilitate taxation and regulatory adherence, the following tax-related requirements must be fulfilled:

• Permanent Account Number (PAN) is required for all financial transactions and tax filings.
  
• Tax Deduction Account Number (TAN) is mandatory if the company is involved in tax deductions at source.
  
• Goods and Services Tax (GST) registration must be obtained if the annual turnover exceeds the prescribed threshold (currently ₹20 lakhs for most services and ₹40 lakhs for goods in certain states).
  

Monthly/Quarterly GST Filings

For businesses subject to GST regulations, timely filing of returns is required:

• GSTR-1 must be filed monthly or quarterly, detailing outward supplies.
  
• GSTR-3B must be submitted monthly to summarize both inward and outward supplies.
  
• Annual GST Return (GSTR-9) must be filed to consolidate the yearly GST transactions.
  

Other Compliance Obligations

Additional regulatory requirements must be met to ensure smooth business operations:

• The company name and incorporation details must be displayed at the registered office as per legal mandates.
  
• Any changes in company details must be reported to the Registrar of Companies (ROC) promptly.
  
• All relevant provisions of the Companies Act, 2013, applicable to OPCs, must be complied with diligently.
  

By adhering to these compliance requirements, an OPC can maintain its credibility and avoid any legal complications. With proper management of compliance obligations, a company’s reputation can be enhanced, facilitating smoother operations and better business prospects. 

At RegisterKaro, comprehensive compliance management services are provided to ensure that all deadlines are met, preventing unnecessary penalties and legal hurdles.

PAN, TAN, and GST Filing for One Person Company Registration

The world of tax compliance can often seem overwhelming, especially for new entrepreneurs. How can you simplify PAN, TAN, and GST filing processes for your OPC? Let’s break it down:

PAN Registration and Filing:

• Application Process: After incorporation, apply for PAN through Form 49A to the Income Tax Department
• Documents Required: Certificate of Incorporation, MOA, AOA, and address proof
• Filing Requirements: Annual Income Tax Return based on the applicable ITR form (typically ITR-6 for companies)

TAN Registration and Filing:

• Application Process: Apply for TAN through Form 49B if your company will deduct tax at source
• TDS Filing: Quarterly filing of TDS returns (Form 24Q for salary payments, Form 26Q for other payments)
• Due Dates: TDS returns must be filed by the due dates specified by the Income Tax Department

GST Registration and Filing:

• Registration Requirement: Mandatory if turnover exceeds ₹20 lakhs (₹10 lakhs for special category states) or if engaged in interstate supplies
• Registration Process: Online application through the GST portal
• Regular Filings:
  • GSTR-1: Monthly/quarterly return for outward supplies
  • GSTR-3B: Monthly summary return
  • GSTR-9: Annual return to be filed by December 31 of the subsequent financial year

Simplified Compliance Strategy:

• Digital Record Keeping: Maintain digital records of all invoices and expenses for easy tax filing
• Compliance Calendar: Create a comprehensive compliance calendar with all important due dates
• Professional Assistance: Consider engaging experienced professionals like RegisterKaro to manage your tax filings

At RegisterKaro, we offer comprehensive tax compliance services tailored specifically for One Person Companies. Our experts handle everything from initial registrations to periodic filings, ensuring you remain compliant while focusing on growing your business.

Conclusion: 

One Person Company registration offers a perfect middle ground for sole entrepreneurs who desire the benefits of incorporation while maintaining complete control over their business. With advantages like limited liability protection, perpetual succession, enhanced credibility, and various tax benefits, an OPC presents an attractive business structure for freelancers, consultants, and small business owners.

Contact RegisterKaro today to simplify your One Person Company registration and compliance management! Our team of experienced professionals will handle all the paperwork and legal complexities, allowing you to focus on what matters most—growing your business.

Frequently Asked Questions (FAQs)

1. What exactly is a One Person Company in India? 

A One Person Company is a legal business entity in India that allows a single person to establish a company with limited liability protection. It combines the benefits of sole proprietorship’s simplicity with the advantages of a private limited company’s legal structure, introduced under the Companies Act, 2013 to encourage entrepreneurship.

2. How is a One Person Company different from a Sole Proprietorship? 

Unlike a sole proprietorship, where the owner and business are legally the same entity, an OPC provides limited liability protection, separating personal assets from business liabilities. OPCs have a formal corporate structure requiring compliance with Companies Act regulations, while enjoying perpetual succession through mandatory nominee provisions.

3. What are the eligibility criteria for registering a One Person Company in India? 

To register an OPC in India, the sole member must be a natural person who is an Indian citizen and resident, having resided in India for at least 182 days in the preceding financial year. The company must appoint a nominee director who will take over in case of the member’s death or incapacity.

4. Can NRIs register a One Person Company in India? 

No, Non-Resident Indians (NRIs) cannot register a One Person Company in India as the Companies Act, 2013 specifically requires the sole member to be a resident Indian citizen. The residency requirement mandates that the person must have stayed in India for at least 182 days during the immediately preceding financial year.

5. What is the minimum capital requirement for One Person Company registration? 

There is no minimum paid-up capital requirement for registering a One Person Company in India following the amendments to the Companies Act. However, entrepreneurs should determine appropriate capital based on their business needs, industry requirements, and anticipated operational expenses.

6. Who can be nominated as a nominee in a One Person Company? 

A nominee in an OPC must be a natural person who is an Indian citizen and resident, capable of entering into a contract, and must provide written consent to become a member in case of the original member’s death or incapacity. The nominee cannot be a nominee for more than one OPC at any time.

7. How long does it take to register a One Person Company in India? 

The registration process for a One Person Company typically takes between 15-20 working days from submission of all required documents. This timeline includes name approval, document verification, certificate of incorporation issuance, and can vary based on the efficiency of document preparation and regulatory processing.

8. How much does it cost to register a One Person Company in India? 

The cost of registering an OPC in India includes government fees (approximately ₹5,000-₹10,000) and professional charges if using services like RegisterKaro (typically ₹8,000-₹15,000). Additional expenses include DSC procurement, stamp duty payments, and post-registration compliance costs like PAN, TAN, and GST registration.

9. Can a One Person Company be converted into a Private Limited Company? 

Yes, an OPC can be converted into a Private Limited Company after filing the required forms with the Registrar of Companies, including a board resolution, altered MOA and AOA, and declaration of minimum two members. The conversion becomes mandatory if the OPC’s paid-up share capital exceeds ₹50 lakhs or average annual turnover exceeds ₹2 crores.

10. What are the tax benefits available for a One Person Company? 

OPCs enjoy a flat corporate tax rate structure (currently 25% for turnover up to ₹400 crores), avoiding the progressive tax rates applicable to individuals. They can claim various business expenses, depreciation, and specific deductions that are unavailable to sole proprietorships, while maintaining limited liability protection.