way2registration | One Person Company

What is a One Person Company?

A One Person Company (OPC) in India is a unique business structure that allows a single individual to start and operate a company with limited liability. Introduced under the Companies Act, 2013, OPC provides the benefits of a company while allowing for sole ownership and control, making it an attractive option for entrepreneurs who wish to operate alone but need the protection and advantages of a corporate entity.

One Person Company

One DIN

One DSC

Name Approval Application

Drafting MOA & AOA

Incorporation Certificate

PAN

TAN

Get Started ₹ 14999/-(All Inclusive)

COMPARISONS

Features of an OPC

Key Features of an OPC
● Single Owner: As the name suggests, an OPC is owned by a single person who acts as the sole shareholder and director. This structure is ideal for entrepreneurs who want complete control over their business without the need for partners.
● Limited Liability: The liability of the sole shareholder is limited to the amount of capital invested in the OPC. This means personal assets are protected from business liabilities and debts.
● Separate Legal Entity: An OPC is a distinct legal entity separate from its owner. It can own property, enter into contracts, and be involved in legal proceedings in its own name.
● Perpetual Succession: OPCs have perpetual succession, meaning the company continues to exist despite changes in ownership or management. This provides stability and longevity to the business.
● Simplified Compliance: OPCs benefit from simplified compliance requirements compared to private limited companies, making them easier and less costly to manage.
Taxation of OPCs in India
● Tax Rate: OPCs are taxed similarly to other companies. They are subject to a flat tax rate of 30% on their total income. Additionally, a surcharge and health and education cess are applicable as per current tax regulations.● Income Tax Filing: OPCs must file their income tax returns annually using Form ITR-6. They are required to maintain accurate books of accounts and file their returns within the stipulated deadlines.● Goods and Services Tax (GST): If the OPC’s annual turnover exceeds the GST registration threshold (INR 40 lakhs for most states, INR 20 lakhs for special category states), it must obtain GST registration and comply with GST filing requirements.● Tax Deductions and Allowances: OPCs can claim various business expenses as deductions, including salaries, rent, utilities, and depreciation. Proper documentation is necessary to ensure all deductions are valid and substantiated.
Registration Process for an OPC
● Obtain Digital Signature Certificates (DSC): The sole director must obtain a digital signature certificate, which is required for filing documents electronically.● Apply for Director Identification Number (DIN): The sole director must apply for a DIN from the Ministry of Corporate Affairs (MCA). This unique identification number is necessary for managing company affairs.● Choose a Name for the OPC: Select a unique and compliant name for your OPC. The name should be distinct and should not be similar to or identical with any existing company or trademark.● Draft the Memorandum and Articles of Association: Prepare the Memorandum of Association (MOA) and Articles of Association (AOA), which outline the company’s objectives and internal regulations.● File Incorporation Documents: Submit the incorporation documents to the Registrar of Companies (RoC) through the MCA portal. This includes the MOA, AOA, DIN, DSC, and other necessary documents.● Obtain Certificate of Incorporation: Upon processing the application, the RoC will issue a Certificate of Incorporation, confirming the establishment of your OPC.● Open a Bank Account: Open a bank account in the name of the OPC. You will need the Certificate of Incorporation, MOA, AOA, and PAN card to complete this process.
Compliances for OPCs
● Annual Filing: OPCs must file an annual return (Form MGT-7) and financial statements (Form AOC-4) with the RoC within the specified deadlines. Non-compliance can result in penalties.● Maintain Books of Accounts: OPCs are required to maintain proper books of accounts and records. Annual financial statements must be prepared and audited if necessary.● File Income Tax Returns: OPCs must file their income tax returns annually and ensure timely payment of any advance tax if applicable.● Compliance with GST: If registered for GST, OPCs must file GST returns periodically and comply with all GST-related requirements, including maintaining records of sales and purchases.● Annual General Meeting (AGM): OPCs are not required to hold an Annual General Meeting (AGM). However, the sole director must sign the financial statements and ensure they are filed with the RoC.● Update Information: Any changes in the OPC’s registered office, director details, or other significant information must be updated with the RoC to ensure compliance.
Is an OPC Right for You?
A One Person Company is an ideal choice for solo entrepreneurs who wish to enjoy the benefits of a corporate structure with limited liability and simplified compliance. It provides a formal business framework with the flexibility of sole ownership, making it suitable for small businesses, startups, and individual professionals.
Before establishing an OPC, it is advisable to consult with legal and financial professionals to ensure it meets your business needs and complies with all regulatory requirements.
Understanding the essentials of an OPC, including taxation, registration, and ongoing compliance, will help you set up a successful and compliant business in India.

ONE PERSON COMPANY

COMPARISONS

Features of an OPC

Registration Process for an OPC

Compliances for OPCs

Is an OPC Right for You?

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