The concept of a One-Person Company (OPC) was introduced in India through the Companies Act, 2013. This was 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. They are also the 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. This is in the preceding financial year.
- Nominee: An OPC must appoint a nominee who will become the director. This is in case the original director/shareholder becomes incapacitated or dies. The nominee must be a resident Indian.
Registrations
- Registered Office: The OPC must have a registered office in India. It 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: You must reserve the OPC name with the Registrar of Companies (ROC) using the RUN (Reserve Unique Name) web service.
Incorporation
- Incorporation: You can incorporate an OPC 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). One also need to apply for Tax Deduction and Collection Account Number (TAN) with the Income Tax Department.
- GST Registration: If your OPC supplies goods or services with an annual turnover exceeding Rs. 20 lakhs, you must register for Goods and Services Tax (GST).
- Annual Compliance: The OPC must comply with the annual filing requirements, such as annual returns and financial statements.
- Conversion: You can convert an OPC into a private limited company if its paid-up share capital exceeds Rs. 50 lakhs or its average annual turnover exceeds Rs. 2 crores.
Conclusion
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.
