One Person Company

OPC (One Person Company)

One Person Company (OPC) is a simplest business form suited for solo founders. OPCs are private limited companies with single owner. But, OPC’s can have more than one directors. OPC registration process also requires you to nominate someone from your circle as a nominee. The nominee can take over the business, if the original shareholder becomes incapable to run the business.

OPCs gives you the flexibility of starting up without waiting for a cofounder and convert into to a private limited later stage. It has got all the features of a private limited company –limited liability, separate legal existence, perpetual succession, concept of shareholding etc.

Documents Required

• Copy of PAN
• Copy of Aadhar Card or Driver’s License or Passport or Voter’s ID
• Address Proof – Latest Bank Statement or Telephone or Mobile Bill (not older than 2 months)
• Passport Size photograph in JPEG format.
• Address Proof of place of business- (Electricity Bill/Tax Paid receipt) and No objection letter from owner of the premise

Process

• Filing OPC name application (The name approval is going to be the most time consuming process if you do not have an unique name to your business. Registrar of companies may reject the names which are similar to existing name phonetically or in spelling. You may get a rejection if there are resembling trademarks or the name applied is generic in nature.)
• Applying digital signature certificate for the director.
• Preparing Memorandum (main objects of company, capital – shareholding pattern are covered in MoA) and Article of associations (bye laws for the operation of the business are covered in AoA)
• Filing incorporation forms with MCA
• Obtaining certification of incorporation, PAN and TAN

Tax

Corporate tax: It is a form of direct tax on profits of an OPC. Corporate taxes on profits in India are 30%, but if the turnover of OPC does not exceed 5 crores tax rate is 29%. Profit making companies requires to pay advance corporate tax on a quarterly basis

Good and Services Tax (GST): Any business dealing in purchase and sales of goods and services in India comes under purview of Indirect Taxation. You have to enrol for GST as and when you reaches the turnover thresholds.

Audit and Compliance:

Statutory Audit and maintenance of books of accounts is mandatory if you are running an OPC. You have to appoint a statutory auditor once you incorporate your one person company. Annual reporting of financial position and operations of the company to Registrar of companies and Income Tax department is mandatory.