OPC Limited Co. Incorporation

The structure of the one person company (OPC) in recent times was launched as a refinement of the structure of a sole proprietorship firm. In an OPC, a single promoter gains full authority over the company thereby, restricting his/her liability towards their contributions to the enterprise. Therefore, the said person will be the sole shareholder and director (however, a director nominee is present, but has zero power until the real director proves incapable of carrying on). Also, there can be no opportunity for contributing to employee stock options or equity funding. Additionally, if an OPC has an average turnover of ₹2 crores thrice in a row and over or acquires a paid-up fund of ₹50 lakh and over, it has to be converted to a private limited company or public limited company within six months.

Benefits of One Person Company Registration

Separate Legal Existence

A One Person Company would obtain the status of a separate legal entity. Such OPC registration ensures that the entity is separate from the owner, unlike a proprietorship firm. OPC can own the assets in its own name and enter into a contract with the parties. The actions of the company are independent of the owner. This is the main benefit of OPC registration.

Lower Compliance Requirements

A Single Person Company is benefited with an exemption to many compliances unlike a private company. Compliances like holding General and Board Meeting, etc. are not applicable to OPC. However, Board Meeting must be held if more than one director is on Board.

Limited Liability of Owners

One of the benefits of registering OPC lies in the separate legal entity of the company where the liability and obligations are not charged over the personal assets of the sole member. The liability of a member is limited to the unpaid amount of the capital subscribed by the member. Even in the case of liquidation, the personal assets of the member are protected, except in certain specified cases.

Separation of Management and Ownership

Even if the OPC is owned by sole personnel, the owner may appoint a director owing up to the responsibility to operate and run a company. The operational duties are assigned to the director(s) whereas the member would be able to fetch profits channeling efforts towards other businesses. However, in One Person Company, the shareholder holds complete control over being a stakeholder.

Documents Required for OPC Registration

PAN card or passport
Passport, for NRIs and foreign nationals
Scanned transcript of driver’s license or voter’s ID
Updated gas or electricity invoice/bank account statement/mobile or landline phone invoice
Specimen signature or impression
Passport-size photo.

Please Note: The OPC director must self-attest to the first three documents. All paperwork for a foreign citizen or NRI must be notarised (if they are currently residing in India or a non-commonwealth country) or apostilled (if living in a commonwealth country at present).

Documents Necessary for the Registered Office

Scanned transcript of current bank account statement/phone or mobile invoice/gas or electricity invoice
Scanned transcript of rental agreement written in the English language
Scanned transcript of a no-objection certificate from the concerned property landowner
Scanned transcript of property or sale deed printed in English (if the property is owned).

Note: Your registered office space needs to be a commercial premises; however, it can be the sole director’s place of residence as well