The concept of a One-Person Company (OPC) was introduced in India through the Companies Act, 2013 to encourage small businesses and entrepreneurs to operate as a company. OPC is a hybrid form of a sole proprietorship and a company where only one person is the owner and shareholder of the company.
Here are the legal requirements for starting a One-Person Company in India:
- Sole Director and Shareholder: As the name suggests, an OPC can have only one director and shareholder, who can be the same person. The director must also have a valid Director Identification Number (DIN) and a Digital Signature Certificate (DSC).
- Resident Indian: The director/shareholder of an OPC must be a resident Indian. A person is considered a resident Indian if they have stayed in India for at least 182 days in the preceding financial year.
- Nominee: An OPC must appoint a nominee who will become the director in case the original director/shareholder becomes incapacitated or dies. The nominee must be a resident Indian.
- Registered Office: The OPC must have a registered office in India, which can be a residential or commercial address. The registered office must be capable of receiving and acknowledging official correspondence.
- Minimum Capital: There is no minimum capital requirement to start an OPC. You can start with any amount of capital as per your business needs.
- Name Reservation: The name of the OPC must be reserved with the Registrar of Companies (ROC) using the RUN (Reserve Unique Name) web service.
- Incorporation: The OPC can be incorporated online through the Ministry of Corporate Affairs (MCA) portal by filing the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form.
- PAN and TAN: Once the OPC is incorporated, you need to apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) with the Income Tax Department.
- GST Registration: If your OPC is engaged in the supply of goods or services with an annual turnover of more than Rs. 20 lakhs, you need to register for Goods and Services Tax (GST) with the GST portal.
- Annual Compliance: The OPC must comply with the annual filing requirements, such as annual returns and financial statements.
- Conversion: The OPC can be converted into a private limited company if its paid-up share capital exceeds Rs.50 lakhs or its average annual turnover exceeds Rs.2 crores.
The concept of a One-Person Company (OPC) was introduced in India through the Companies Act, 2013 to encourage small businesses and entrepreneurs to operate as a company. OPC is a hybrid form of a sole proprietorship and a company where only one person is the owner and shareholder of the company.
