What do I need to know about forming my One Person Company?

What is a One Person Company?

A one-person company is a corporate form of a sole proprietorship firm that is recognized as a private limited company under section 3(1)(c) of the Companies Act 2013. The primary objective of an OPC is to give the entity a separate legal structure while limiting the personal liability of the owner. This means that the owner of a one-person company will not be personally liable for the company's debts or liabilities, unlike a sole proprietorship firm.

Do I need a One Person Company?

A One Person Company isn't always required. Still, many small business owners choose to incorporate an OPC because of its perpetual existence with limited liability protection. This protects the entity's existence in case of the death/disability of the sole person through appointment of another person as Nominee Director. On the death of the original director, the nominee director will manage the company affairs till the date of transmission of shares to the legal heirs of the demised members

What does it mean to incorporate a OPC?

When you incorporate a One Person Company, you need to reserve a unique name, draft MOA & AOA, file various registration forms and get it certified by a practising professional (CA/CS/CWA). Upon approval of registration with the MCA, the OPC will get a certificate of incorporation containing the CIN, PAN, TAN and one Din (Director identification number). You can then use this separate PAN to record your business expenses, take on business debts, file taxes, obtain government licenses, and more—and this is what gives you liability protection.     

How easy is it to form a Limited Liability Partnership?

You may be slightly intimidated by the idea of forming a legal entity like a One Person Company, especially if it's your first time. All you need is an understanding of what your business will do, how you plan to run it, a unique name for your business, and an address for registration which can also be your home address, then reach out to Chartered ONE team, we will take care of the rest.

Benefits of Registering a One Person Company

Benefits of Registering a Limited Liability Partnership:

Some of the benefits of registering a One Person Company are as follows:

1. Separate Legal Entity: A One Person Company is a separate legal person with its own legal rights and obligations that are separate from the Shareholder. This means that the shareholder and the company are two different entities for every purpose.
2. Perpetual existence: Unlike a proprietorship firm, the Existence of a One Person Company is not dependent upon its member; it can continue to exist even after the retirement, insanity, insolvency or even death of that one sole director of the company. Further, it can enter into contracts and hold property in its name.
3. Direct Control on Management: The sole director of the OPC has the right to manage the business directly.
4. Limited Liability: . This means the liability of the partners has certain limitations in their contribution to the LLP. Hence, the creditors of the LLP are not the creditors of individual partners. 
   
5. Increased Credibility: Forming an OPC gives the business a corporate structure that improves credibility amongst suppliers, lenders, buyers, banks, and any other third party.

One Person Company Registration Process

The procedure of forming a One Person Company in India involves the following steps:

Step 1: Applying for Name approval

The next step is to file a SPICe + Part A (RUN) web form to reserve the unique name of the OPC. Chartered ONE ensures you secure your dream company name during an initial availability check. However, if your preferred name is already registered, we provide unlimited alternative company name searches to help you find the perfect fit.

Step 1: Application for Digital Signature

As per the guidelines, all applications to the Registrar of Companies are filed in digital format and are therefore required to be authenticated using a digital signature of the authorized signatory. The Proposed Director must acquire a Class 2 or Class 3 DSC to sign the SPice+ form online. Chartered ONE offers Digital Signature service, fulfilling this requirement of obtaining a DSC for ROC fillings.

Step 3: Filing SPICe + Part B form for registration of OPC

The application for registration is drafted using SPICe + Part B form, a simplified proforma for OPC registration electronically. The application must be accompanied by the required documents, including the MOA, AOA, proof of registered office address, and practising professional (CA/CS/CWA) certification. Chartered ONE makes your OPC formation easy and simple.

Step 4: Pay & File Incorporation Documents

Pay the requisite fee to Ministry of Corporate Affairs along with the applicable stamp duty and file for Incorporation.

Step 5: Receive Certificate of Incorporation of OPC

Upon successful verification by the ROC, you will receive a Certificate of Incorporation consisting of CIN along with DIN allotted to the proposed director, PAN & TAN.

Step 5: Opening of Bank Account in India

Once PAN is obtained, OPC will be eligible to open a current Business account. Chartered ONE offers multiple banks to choose from, with the process being entirely remote & streamlining the experience for you.

Document required for One Person Company Registration

Documents Required for Forming One Person Company are:

1. KYC of Director (PAN & Aadhar)
2. Passport-size photo of director
3. A copy of the rental agreement if the registered office is rented.
4. Copy of utility bill (water/gas/electricity) of the rented property
5. No Objection Certificate from the owner of the property

One Person Company Registration Fees