Simply put a rather generous parting gift to the Companies Act, 1956, on the occasion of its retirement. An OPC is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Thus, it does away with the hassles of finding the right kind of co-partner/s for starting a business as registered entity. The best part is, legal and financial liability is limited to the Company and not the member. Hence, you do not need to share your piece of cake in the name of partnership. You have an idea…You own it! Start your own OPC. 

Legal Status of OPC 

Section 2(62) defines OPC as a Company which has only one person as a member. The Company Incorporation Rules provide that only a natural person who is a resident of India and also a citizen of India can form a one person company. It means that other legal entities like companies or societies, other corporate entities, Non resident Indians or Foreign citizens cannot form a one person company. Further the rules also specify that on one person can be a shareholder only in single One Person Company at any given time. It simply means an individual cannot have two different one person companies in his name.

Advantages Of OPC:-

OPC served various advantages which are as under:-

• OPC provides the start-up entrepreneurs with new business idea.
• OPC provides an outlet for the entrepreneurial impulses among the professionals.
• It has advantages of limited liability. The most significant reason for shareholders to incorporate the OPC is certainly the desire for limited liability.
• OPC is not proprietorship concern; hence, they give a dual entity to the company as well as the individual, guarding the individual against any pitfalls of liabilities. This is the fundamental difference between OPC and sole proprietorship.
• Unlike a private limited or public limited company (listed or unlisted), OPC need not bother too much about compliances.
• Businesses currently run under the proprietorship model could get converted into OPC without any difficulty.
• OPC require minimal capital to begin with. Being a recognized corporate, OPC can raise capital from others like venture capital financial institutions etc., thus graduating to a private limited company.
• Mandatory rotation of auditor after expiry of maximum term is not applicable.
• The annual return of a One Person Company shall be signed by the company secretary, or where there is no company secretary, by the director of the company.
• The provisions of Section 98 and Sections 100 to 111 (both inclusive), relating to holding of general meetings, shall not apply to a One Person Company.
• One Person Company needs to have minimum of one director. It can have directors up to a maximum of 15 which can also be increased by passing a special resolution as in case of any other company.

• For the purposes of holding board meetings, in case of one person company having only one director, it shall be sufficient if all resolutions passed by such company are entered in the minutes-book, signed and dated by the member and such date shall be deemed to be the date of the board meeting for all the purposes under this Act. For other One Person Companies, at least one board meeting must be held in each half of the calendar year and the gap between the two meetings should not be less than 90 days.

• The financial statements of OPC can be signed by one director alone. Cash Flow Statement is not a mandatory part of financial statements for OPC. Financial statements of OPC need to be filed with the Registrar, after they are duly adopted by the member, within 180 days of closure of financial year along with all necessary documents.

• The financial statements of OPC can be signed by one director alone. Cash Flow Statement is not a mandatory part of financial statements for OPC. Financial statements of OPC need to be filed with the Registrar, after they are duly adopted by the member, within 180 days of closure of financial year along with all necessary documents.

• Board’s report to be annexed to financial statements may only contain explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report.

Major Steps involved for incorporation of OPC:-

• Getting DSC
• Getting DIN
• Name Search and application for Name Availability.
• Drafting of Bye Laws (MOA & AOA)
  

List of documents and forms required in Company Registration :-

• Various Forms to be filed & circumstances
• Requirements in Formation of a OPC. 

Minimum Requirement to be fulfilled to Form a OPC:-

• One promoter (Shareholder)
• One director
• Authorized capital of Rs.1,00,000
• DIN (Director Identification Number) for  the director.
• DSC (Digital Signature Certificate) for the director.
• One Nominee

Note: Director and the shareholder is the same person.

Getting DSC

What is a Digital Signature Certificate (DSC)? 

The Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by the companies under MCA21 e-Governance program are required to be filed with the use of Digital Signatures by the person authorized to sign the documents.

Class of DSC:-  

The Ministry of Corporate Affairs has stipulated a Class-II or above category signing certificate for e-filings under MCA21. A person who already has the specified DSC for any other application can use the same for filings under MCA21 and is not required to obtain a fresh DSC.  

Required documents for getting DSC:-

Specified Form filled as per given guidelines.

• ID proof of the applicant (Copy of the PAN card should be attested by the Gazetted officer/Bank manager/Post master).
• Address proof (Passport/ Aadhar card/Driving License/Voter Id/ latest Utility Bill like Electricity bill, Telephone bill, Water bill, Gas bill, etc, Property Tax receipt). This needs to be attested by a Gazetted officer/ Bank manager/ Post master.
• Passport size photo(3.5 cm X 2.5 cm)
• Valid Email Id and Mobile No.

Getting DIN

The concept of a Director Identification Number (DIN) has been introduced for the first time with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006. As such, all the existing and intending directors have to obtain DIN within the prescribed time-frame as notified.

DIN is a unique identification number allotted to an individual who is an existing director of the company or intends to be appointed as director of a company. DIN is an 8 digit number. For example: 02165789.This is allotted by Central Government (office of regional director), Ministry of Corporate Affairs.

Required documents/information’s for Allotment of DIN:-

• Self attested copy of the PAN Card, the signature must be same as in PAN.

• Self attested identity proof of the proposed directors (Voter ID Card/ Valid Driving License/ Valid Passport/ Aadhar Card etc).

• Self attested Address proof of the proposed directors (Latest Bank Statement within 2months Showing current transactions/ Latest Telephone or Mobile Bill/ Latest Electricity Bill etc).

• Passport size color & clear photograph (3.5 cm X 2.5 cm)

• An specified Affidavit by the individual (Declaration by the individual and self attested)

• Educational Qualification

• Current Occupation

• Valid Email Id and Mobile No.

• Signature should be same as in PAN card.
  

Before you fill-in applications for DIN please remember following common causes of Rejections.

Applicant's name and father's name mentioned in abbreviated form: The Name should be expanded even if the ID proof contains the name in abbreviated form.

• Mismatch in the applicant’s name and father's name in DIN form with the ID (Identity) proof enclosed: Any mismatch in name, including spelling mistake, may lead to rejection of application. Minor spelling deviations in the father's name may be accepted, if such deviations do not materially impact the name.

• Prefixes like Mr/ Ms/ Kumari/ Shri/ etc. used in the applicant's name.

• Residence proof(s) like Bank Statements, Electricity Bill, Telephone Bill, Utility bills, etc, submitted are older than 2 months of submitting the application for verification such documents are in the name of some other person, for example father or spouse.

• The supporting documents are not duly attested by the proposed directors.

• Passport/Driving License/Identity proofs/etc attached is expired: Only such documents which are currently valid should be attached.

• The signature is not the same with the signature in the PAN card.

Name Search and application for Name Availability :- 

• Next step in the formation of a company is the approval of the name by the Registrar of Companies (ROC) in the State/ Union Territory in which the company will maintain its Registered Office. This approval is provided subject to certain conditions: for instance,

• There should not be an existing company by the same name.

• The first word contain a noun and the second word must relate to the main object of the proposed company .

• The last words in the name are required to be "OPC Private Ltd."

• The application should mention at least two suitable names to maximum 6 names of the proposed company, in order of preference.

Once company name is approved, it is valid for a period of sixty days from the date of application, within which time Memorandum of Association (MOA) and Articles of Association (AOA) together with miscellaneous documents should be filed. If one is unable to do so, then an application may be made for renewal of name by paying additional fees. 

 The following information is required for seeking name approval:-  

Proposed name of the company and Alternative names (2 to 6 names)

• Names of the proposed first promoter/ director – minimum 1
• Authorized Share Capital – minimum INR 100000
• Main objects of the company in brief. (In 200 alphabetic words)
• Address of Registered office of the proposed company
• Address of the nearest police station of the proposed registered address of the company.
• NOC if the promoter is carrying on any Partnership firm, sole proprietary or unregistered entity in the name as applied.
• NOC from the person if the proposed name(s) contain(s) name of any person other than promoter(s) or their close blood relatives.
• If the proposed name(s) include(s) the name of relatives then the proof of relationship is also required. 

Drafting of Bye Laws (MOA & AOA) 

The Memorandum of Association is a document that sets out the constitution of the company. It contains, amongst others, the main objectives, incidental or ancillary objectives for the attainment of the main objectives and the scope of activity of the company and also describes the relationship of the company with the outside world.

The Articles of Association contain the rules and regulations of the company for the management of its internal affairs. While the Memorandum specifies the objectives and purposes for which the Company has been formed, the Articles lay down the rules and regulations for achieving those objectives and purposes. It also states the authorized share capital of the proposed company and the names of its first / permanent directors.

Incorporation Process:-

I.  After getting the name approval, the MOA/ AOA have to be drafted.

II. Get the subscription sheet of MOA and AOA signed by the subscriber/promoter in his own handwriting with the following details as per the given order:-

• The name of the subscriber

• Father’s name of the subscriber

• Address of the Subscriber

• Occupation of the subscriber

The subscription sheets of MOA must be mentioned the number of shares subscribed by the promoters in numbers as well as words and the passport size photograph of the subscribers must be affixed. The subscription sheets of MOA/AOA must be witnessed by at least one person. The nominee also specify his name, address & occupation along with his specimen signature in the subscription sheet.

3. Form INC 2 

The following information/documents required in Form INC2:-

• Finalized MOA/ AOA containing subscription sheets.

• Affidavit for non acceptance of public deposit from the promoter/ director.

• PAN card, address proof, identity proof of the promoter and the nominee.

• INC 8, 9 &10 in specified format.

• DIR2 in specified format.

• INC 3 consent from nominee.

• Address proof of the company along with NOC  (if address proof is not in the promoter name then lease deed);

• Duly digitally signed by promoter/ director .

After obtaining the details of Form INC2 these above cited forms are uploaded on the MCA portal with the respective fees along with the stamp duty of the respective state. After that we get the incorporation certificate having CIN (corporate identification number) like U 72900 RJ 2012 PTC 039206.

The certificate of incorporation along with the approval of commencement of business will be required while opening the current account in the name of the company with any bank.  

Documents/Information Required During Incorporation Process

Following documents/ forms need to be submitted along with requisite fee which is based on the amount of authorized capital as under:-  

DOCUMENTS / FORMS REQUIRED AFTER INCORPORATION 

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