One Person Company (OPC) Registration

The registration process for an OPC involves several steps, from obtaining necessary documents to filing forms with the RoC. Here's a step-by-step guide:

LegalDev Registration Services for One Person Company in India

At LegalDev, we specialize in providing comprehensive CA and business legal services, including One Person Company registration. Our expert team simplifies the registration process, ensuring compliance with all legal requirements.

Here's how we can assist you:

Expert Guidance: Our experienced professionals guide you through every step of the registration process, from obtaining DSC and DIN to filing necessary forms with the RoC.

Document Preparation: We assist in drafting the Memorandum of Association (MoA) and Articles of Association (AoA), ensuring they meet legal standards.

Name Approval: We help you choose a unique and compliant name for your OPC and obtain approval from the Registrar of Companies.

Compliance Management: Our services extend beyond registration, providing ongoing compliance support to ensure your OPC adheres to legal and regulatory requirements.

Affordable Packages: We offer cost-effective registration packages tailored to meet the needs of small business owners, ensuring you receive quality services at competitive prices.

Features of One Person Company

One Person Company possesses distinct features that set it apart from other business structures:

• Single Owner: OPC is owned and managed by a single individual, simplifying decision-making processes.
• Limited Liability: The owner's liability is limited to the amount invested in the business, protecting personal assets.
• Separate Legal Entity: OPC is recognized as a separate legal entity, distinct from its owner.
• Nominee Provision: A nominee is appointed during registration to take over the company in case of the owner's demise.
• Perpetual Succession: OPC continues to exist even if the owner passes away, ensuring business continuity.

Tax Implications for OPC

Understanding the tax implications for One Person Company is crucial for financial planning:

Corporate Tax: OPCs are subject to corporate tax rates applicable to private limited companies. The current corporate tax rate is 22% (plus applicable surcharge and cess) for domestic companies not availing of any exemptions or incentives.

Dividend Distribution Tax (DDT): OPCs are required to pay DDT on dividends distributed to shareholders. However, DDT was abolished in the Union Budget 2020, and dividends are now taxed in the hands of the recipient.

GST Compliance: If the annual turnover exceeds the threshold limit (currently ₹40 lakhs for goods and ₹20 lakhs for services), the OPC must register under the Goods and Services Tax (GST) regime and comply with GST filing requirements.

Managing Directorship and Nominee in OPCs

The management structure of OPC includes a sole director and a nominee:

Sole Director: The sole owner acts as the director, responsible for managing the company's operations and making strategic decisions.

Nominee: A nominee is appointed during the registration process to take over the company's operations in case of the owner's demise. The nominee must provide consent and necessary identification documents.

 

Annual Compliance and Filings for OPC

To maintain legal standing, OPCs must adhere to annual compliance requirements:

Financial Statements: Prepare and file audited financial statements, including the balance sheet and profit and loss account, with the RoC.

Annual Return: File an annual return containing details of the company's management, shareholders, and financial performance.

Income Tax Return: File the annual income tax return with the Income Tax Department, adhering to applicable tax laws and deadlines.

GST Returns: If registered under GST, file monthly or quarterly GST returns, detailing sales, purchases, and tax liability.

 

Restrictions on One Person Company

While OPCs offer numerous advantages, they also face certain restrictions:

1. Single Shareholder: An OPC can have only one shareholder, limiting its capacity to raise equity capital from multiple investors.
2. Conversion Restrictions: An OPC cannot voluntarily convert into a public company or a private company with more than one shareholder until two years have elapsed from its incorporation.
3. Business Activities: OPCs are restricted from carrying out certain business activities, such as Non-Banking Financial Activities (NBFC) and investment activities.
4. Paid-up Capital and Turnover Limits: If the paid-up capital exceeds ₹50 lakhs or the annual turnover exceeds ₹2 crores, the OPC must convert into a private or public limited company.